Trailing Commissions

Trailing commissions are the commissions paid to brokers, financial advisors, and in some cases provider, who open superannuation, pension and investment policies and loans. However, rather than those trailing commissions – which are applied to almost every kind of policy, investment or loan you currently hold – going to someone else, Commission Rebates can make sure they are returned to you.

What Are Trailing Commissions on Superannuation and Investments?

Once your superannuation fund or allocated pension account is opened, you are charged ongoing fees on those funds. These are the trailing commissions and are calculated on a percentage of your investment value. If a financial advisor set up the investment or account for you, the trailing commissions are paid to him. However, even if you dealt directly with the investment or superannuation provider, those trailing commissions are still not paid to you, they are paid back to the provider.

In most cases you cannot avoid paying trailing commissions on your superannuation and investments; trailing commissions are calculated and paid from the management expense ratio of your investment so they are just part of your policy. What you can control however, is where those commissions end up, and that is where Commission Rebates comes in because we believe that since the commissions are generated from your policies, they should be returned to you.

Trailing commissions are usually between 0.4% and 1.2% of your investment or superannuation account and while this may not sound like a lot, a 1.00% trailing commissions on a $200,000 investment for example, is $2,000 a year going to a broker, a financial advisor or a provider – and not to you.

Are There Trailing Commissions on Personal Insurance Policies?

In most cases, yes – trailing commissions are also charged on personal insurance policies such as your life insurance, income protection and trauma insurance policies. The trailing commissions come out each time you pay your insurance premiums, as a percentage of that payment goes to the person or provider who established the policy. Trailing commissions on personal insurance policies are also usually much higher, often between 10-30% of your annual insurance premiums.

How Do Trailing Commissions on Home Loans Differ?

If your home loan was established for you by a mortgage broker, then you are paying trailing commissions on that loan. However, in the case of a home loan, the trailing commissions are paid to your mortgage broker from the bank which holds your loan, out of the bank’s own funds, not from your repayments or fees.

So as you can see, you are probably paying thousands of dollars in trailing commissions from your insurance policies, investments and loans – just think about all the different financial products you already have. But you can stop paying those commissions and start diverting them back to your own pocket with the help of Commission Rebates, you can request your refund by registering now.

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