Australians paying more than $3 billion a year in ongoing fees: YourShare

Ongoing fees to financial advisors and brokers are costing Australians $3.367 billion a year, according to a cash back provision company.

In a report commissioned by YourShare, research and consultancy firm Rice Warner have calculated the total annual ongoing fees and commission paid to brokers for life insurance, mortgages, superannuation and pensions and managed funds.

According to their research, each Australian pays an average of $1,808 per year for ongoing financial services fees.

Australia’s ongoing fee and commission costs, per person, per year:

• $688 on mortgages (based on an average size loan of $344,221)
• $404 on life insurance (on an average annual policy premium of $2,019)
• $546 on non-super managed funds (on an average investment of $136,612)
• $170 on retail super (on an average account balance of $77,980).

YouShare’s chief executive Ron Hodge says that many consumers are not aware of the ongoing fees.

“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,” says Hodge.

 “$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,” he says.

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Source: YourShare. *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.

YouShare offers a service helping people get cash back for hidden fees.