YourShare.com.au, Australia’s most awarded cash back provider, today released its first Ongoing Fees in Financial Services report showing Banks, brokers and advisors are paid over $3 billion every year on a broad range of everyday household financial services. Mr Ron Hodge, CEO of YourShare said, “These ongoing fees are hidden to many consumers because they were either not disclosed or they were buried deep in paperwork when you initially bought these products. At YourShare, we believe in helping our members to take back their share of these fees.”
YourShare commissioned the independent research and consultancy business, Rice Warner to compile the report, based on the financial year 2013. YourShare and Rice Warner believe this is the first study to calculate total annual ongoing fees/commissions paid to brokers and advisers for a basket of widely-used products and services.
On a per person basis, the study found that for the period covered, the average annual ongoing fee/commission
* on mortgages was $688 (based on an average size loan of $344,221)
* on life insurance was $404 (on an average annual policy premium of $2,019)
* on managed funds (non-super) was $546 (on an average investment of $136,612)
* on retail super was $170 (on an average account balance of $77,980).
In total, for this basket of financial products, the average annual ongoing fee/commission charged per person was $1,808.
Mr Hodge said, “$3.367 billion is an enormous amount for Australians to be paying out in annual, ongoing fees to advisers and brokers for the financial products that most of us have, especially if you are no longer being serviced by your adviser or broker”.
YourShare has been helping Australians for the past 10 years to claim back their share of these hidden fees, being named Best Cash-Back Provider of the year for the past six years by Money Magazine.
|Industry||Value subject to fees ($M) #||Total policies / members (‘000)||Avg investment / policy / loan ($)||Avg % ongoing fees||Total commissions ($M)||Avg commission per year ($)|
|Superannuation (retail only)||458,134||5,875||77,980||0.22%||999||170|
|Managed Funds (non-super)||105,874||775||136,612||0.40%||423||546|
*the sum of commissions has been used to show the impact on Australians holding multiple products
^average sums insured are $450,000 term, $490,000 TPD, $245,000 trauma and $5,800 per month income protection
# FUM / Premiums / Outstanding loan