Australians who pay for their financial advice by commissions, could be paying as much as 13 times too much, according to a new report by Rice Warner Actuaries.
The report, commissioned by Industry Super Network (ISN), compared the net value of advice provided by Industry Fund Financial Planning (IFFP) and advisers remunerated by sales commissions.
The report reveals that consumers are substantially better off paying for their advice on a ‘fee for service' basis rather than paying ongoing commissions.
"There are many vocal critics of the conflicts of interest inherent in the antiquated commission system. This research reveals for the first time that fee for service advice is more cost-effective than commission-based advice", said Mr David Whiteley, Executive Manager, Industry Super Network.
Download the report