How Financial Adviser Fees Work Inside Superannuation

Many Australians pay their financial adviser directly from their superannuation account without fully understanding how the arrangement works, what limits apply, or what they are entitled to know. If your adviser has suggested deducting their fees from your super, here is what you should understand before you agree.

Can adviser fees be paid from super?

Yes - in certain circumstances, financial adviser fees can be deducted from your superannuation account rather than paid directly from your bank account. This is often referred to as "fee deduction from super" or an "adviser service fee." The arrangement can be convenient, but it is not automatic and it is not without conditions.

Your superannuation fund must agree to the arrangement, and the advice being paid for must relate to your superannuation - it cannot be used to pay for general financial advice unrelated to your super. The rules around what qualifies are detailed and have tightened significantly in recent years following regulatory reforms.

What fees can and cannot be deducted from super

The general principle is that fees paid from super must relate directly to advice about your superannuation account - your investment options, contribution strategy, insurance within super, or retirement income planning from that fund. Fees for advice about matters outside super - such as investment property, shares held outside super, or personal insurance outside super - generally cannot be deducted from your superannuation account.

If an adviser quotes you a total fee and proposes deducting the whole amount from super, it is worth asking them to be specific about which portion relates to superannuation advice and why the full amount qualifies. An adviser who cannot explain this clearly may not have a solid basis for the deduction.

Ongoing fee arrangements

If you have an ongoing advice relationship where fees are deducted from your super regularly, your adviser is required to get your written consent before fees are deducted, renew that consent annually, and provide you with an annual fee disclosure statement showing exactly what fees were charged and what services you received in return.

This requirement exists because before 2013, many Australians were paying ongoing adviser fees from their super accounts for years without realising it - sometimes receiving little or nothing in return. The reforms were designed to make the arrangement transparent and opt-in rather than automatic.

If you are unsure whether you have an ongoing fee arrangement in place, contact your superannuation fund directly and ask them to confirm any adviser fee authorities on your account.

What your super fund is required to tell you

Your superannuation fund must notify you before deducting any adviser fee, and they must stop deducting fees if you withdraw your consent. They are also required to report adviser fees paid from your account in your annual statement. If you are reviewing your super statement and see adviser fees you do not recognise or did not authorise, contact your fund immediately.

How fees affect your retirement balance

Fees paid from super reduce your account balance and therefore reduce the compound growth of your savings over time. A fee that seems small as a percentage can compound into a significant reduction in your final retirement balance over decades. It is worth asking your adviser to show you a projection of the impact of their fees on your retirement balance over the expected period of the advice relationship.

This is not an argument against paying adviser fees from super - for the right advice, the value can far outweigh the cost - but it is an argument for understanding exactly what you are paying and what you are getting in return. Our guide on how much a financial adviser costs in Australia covers fee structures more broadly.

Superannuation advice specifically

Advisers who provide advice specifically about superannuation must be authorised to do so on the ASIC register. You can check an adviser's superannuation authorisation on their profile in this directory or directly on the ASIC Financial Advisers Register. Our guide on superannuation advice and what a financial adviser can help with covers the types of super advice in more detail.

Before you agree to fee deduction from super

Ask your adviser to confirm in writing exactly what services the fees cover, that those services relate to your superannuation, and how the fee will be calculated. Ask your super fund to confirm they have received a fee authority and what the authorised amount is. Review your annual statement each year to confirm fees are being deducted correctly and that you are receiving the services you agreed to pay for.

You can verify an adviser's registration and superannuation authorisation using the financial advisers directory, or check their profile directly to see their full list of authorisations drawn from the ASIC register.