Apr 24, 2018

The biggest banking rip-off is still to come

The biggest rip-off in financial services is the huge fees charged by retail superannuation funds, which flow to the big banks and AMP for delivering poorer performance.

Bernard Keane — Politics editor

Bernard Keane

Politics editor

The Commissioner Kenneth Hayne during The Royal Commission's initial public hearing into Misconduct in the Banking, Superannuation and Financial Services Industry in Melbourne, Monday, February 12, 2018. (AAP Image/Fairfax media, Eddie Jim) NO ARCHIVING

Royal Commissioner Kenneth Hayne

Most of the headlines from the banking royal commission so far have related to rip-offs like fees for services never provided, fees charged to dead clients and rotten advice costing people tens of thousands of dollars. But there's a far bigger rip-off that is likely to go unexamined, one that costs billions compared to the hundreds of millions that the banks' and AMP's compensation bills are likely to amount to. And it affects millions of Australian consumers.

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13 thoughts on “The biggest banking rip-off is still to come

  1. Wayne Cusick

    Talking about fees, what about EFT fees the banks charge retailers/service providers/etc, which are then passed onto consumers.

    If memory serves, the ACCC told small businesses that charging 10c for EFT when paying for a coffee was too high a percentage. But why is it a percentage in the first place?

    Surely an electronic funds transfer costs the provider (eg the bank) the same whether it is $1 or $1,000,000?

    It seems to me that the ACCC should have told all providers that the maximum EFT fee was 10c.

  2. Dog's Breakfast

    And if the government has its way, the industry funds will be operating like the retail funds, and the rip-offs will be broad-scale.

    There’s a strong argument that there should be a government run industry fund available to everyone. Why anyone would invest in a retail fund is beyond me.

    I’m always so impressed when I see that the CBA’s staff super is going gangbusters, while the retail offering by the same bank is an also-ran. They know where to invest their money, and it ain’t their retail fund!

    1. Ian Roberts

      Super fund run by THIS government? You must be kidding!

    2. drsmithy

      There’s a strong argument super is little more than a tax rort for the wealthy and a subsidy-by-stealth for the finance industry and should be shut down in favour of a proper liveable pension for the majority.

  3. john OCallaghan

    It is quite way obvious why Kelly O’Liar has been pushing with all her strength for years to get the banks to take over the Industry Super Funds,it wouls benefit her precious NAB bank and all the others as well of course.
    Why do conservatives always think that they are the only ones who should have a reasonable healthy ban account but the rest of us dont deserve it and really should go and suck eggs? Could someone tell me the answer?

  4. Djbekka

    Oh Bernard…. Again, not news! While your imagined cool, young readers may not have noticed the ongoing failure of the commercial funds to perform as well as the industry or state funds, those of us in the better performers have been enjoying the news whenever it is reported. The only scandal here is the LNP politicians’ commitment to reducing the performance of the not for profit firms to the level of the firms with high fees and poor advice. As I recall, the government wanted super to be included so it could justify putting bankers on the boards of industry funds instead of the ‘wicked’ trade unionists who think of their members instead of their own bank accounts. (the horror, the horror). Somehow I suspect the Royal Commission will get around to asking for submissions from the Super funds and then having a look at those 10 year results.

    Come on – report and analyse what is happening. Meanwhile, I raise my cup to the back room lawyers and other researchers working for the Royal Commission.

    1. AR

      It is a joy to listen Senior Counsel Assisting dissect a dissembling suit but her Junior is no slouch.
      They alone have persuaded me that the profession should, perhaps, not be shot on sight, come the Revolution.

    2. Bill Hilliger

      Yes and the financial wizardry of the Dolt from Higgins aka Kelly O’Dwyer is working hard to make this happen. With foresight she should also be put into the RC dock to explain her rationale behind trying to link retail fund managers with industry super fund management. Given her insiders interview with Barrie Cassidy last Sunday, that will surely be a hoot! Cynics are asking, is someone on the take here? Unkind people are saying, …most likely!

  5. bref

    Its no secret that industry funds do better (they’ve been advertising it for years) and anyone who’s still in a private fund deserves their misfortune. It will be interesting if the RC finds any skeletons in the industry funds that we didn’t know about…

  6. Norm

    Thank you Bernard, well said. And, no doubt, the LNP and their shills will insist that white is indeed black.

  7. Pauline

    Have been in business since 1981 and never had Super … I have watched people lose their life savings twice due to badly managed, unprotected super funds so never have, never will go there .. wonder how many others agree

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