Exposing the hidden costs

2019-05-08 06:02

BIG financial services companies may soon need to find new ways to pad their earnings, as a new industry standard is threatening to expose the sector’s worst kept secret — hidden fees.

The Retirement Savings Cost (RSC) Disclosure Standard — developed by the Association for Savings and Investment South Africa (Asisa) — is designed to encourage financial service providers to be more transparent and give clients a clearer picture of their fee structures.

The standardised retirement savings cost disclosure methodology is intended to assist employers when comparing costs from the different umbrella fund providers that are members of Asisa.

While there is no law that will enforce the RSC Disclosure Standard, there is hope that industry players will do the right thing for the benefit of consumers and abide by the standard.

Fedgroup CFO Sheldon Friedericksen said that in the past, companies were only required to reveal their asset management fees and their service fees, which is where most of the hidden costs were located — these can include admin fees, reporting fees and share trading costs.

“You always knew they were there, but you didn’t know what they were,” said Friedericksen. While there is optimism that the standard will change the way in which financial service providers reveal their fee structures, it is unlikely that consumers will see a sudden drop in fees once hidden costs have been exposed. “The new standard is still being interpreted and debated, and there will always be loopholes.

“At the end of the day, it is still up to the moral compass of the industry to implement this effectively,” said Friedericksen.

Fedgroup Life CEO Walter van der Merwe said the new standard is a huge leap in the right direction for the consumer. — .Weekend Witness

NEXT ON NEWS24X

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

Inside News24

 
Traffic Alerts
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.