A record $2.4 billion was “ripped” from the superannuation system in the form of sales commissions paid to financial advisers throughout 2007, according to a report commisioned by the Industry Super Network.

Moreover, Rainmaker’s Commission Revenue Report found that in the three years to December 31 2007, approximately $5.9 billion was pocketed by advisers as sales commissions. An estimated $862 million was paid in sales commissions solely on compulsory super contributions during 2007, a sum that Industry Super Network (ISN) executive director David Whiteley slammed as “indefensible” because they “erode individual and national savings”. The report found that the net compulsory superannuation contribution made by a retail fund member, after tax and commissions were paid, was 7.5 per cent – 0.15 per cent less than that made by a member of an industry super fund. “Any debate about national savings and the adequacy of retirement savings must take into account the effect of sales commissions. Banning sales commissions would evidently lift national savings,” Whiteley said. The report was commissioned by the ISN.

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