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ASIC agrees exit fees and commissions a problem.



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SENATOR NICK SHERRY

SHADOW MINISTER FOR RETIREMENT INCOMES AND SAVINGS

MEDIA RELEASE

8 May 2003

ASIC agrees exit fees and commissions a problem

The Government’s financial services regulator ASIC agreed today that exit fees on superannuation and advisor commissions are significant problems.

Evidence from ASIC at a Senate committee hearing in Melbourne confirms what Labor has been telling the Government for the last year.

ASIC officers agreed that exit fees were a barrier to changing super funds. This supports Labor’s view that exit fees undermine consumer choice.

ASIC also agreed that commissions paid on product sales caused a potential conflict of interest for financial advisors.

Labor has told the Government to act on exit fees and commissions before choice of fund is introduced. Choice will not work if consumers have to second guess whether advice is in their best interest and if exit fees prevent them from moving their money around.

ASIC also agreed that consumer education, while important, is not sufficient to safeguard retirement savings. Consumers deserve strong protections under any choice legislation, including a ban on exit fees and commissions on compulsory super. So far, only Labor is prepared to offer these protections.

For more information or comment please contact: Senator Nick Sherry 0418 482 807 Lana Joyce 0414 505 989