The Industry Super Network expressed strong support Monday for the Australian government’s proposals that require financial planners to disclose the fees and commissions they are receiving from their clients’ investments and superannuation accounts on an annual basis.

David Whiteley, chief executive of ISN, issued a statement saying, “It is a community expectation that a service provider will disclose the cost of their service to their customer or client.

“It is extraordinary that the financial planning industry would be surprised that this commonplace arrangement should not apply to financial planners.

“I cannot think of another industry where ongoing fees and charges are not clearly disclosed to customers and clients on an ongoing basis.

“Disclosure of fees and commissions will enable super fund members to assess the value of the service they are receiving from their financial planner”, said Whiteley.

ISN explained this is necessary because there is substantial evidence that millions of Australians pay ongoing sales commissions and advice fees without receiving financial advice.

According to Roy Morgan, 72 per cent of retail fund clients do not have regular contact with their financial planner. ASIC research suggests two thirds of financial planner clients are 'inactive'.

Research by consultancy firm Radar Results found the ratio of inactive to active financial planning clients was 5:1. According the government’s Explanatory Memorandum, the average adviser has 380 clients of which only 40 per cent are advised regularly on a face to face basis.

“The financial planning industry has once again failed to meet even the most basic expectations of a profession – to disclose how much a client is being charged”, said Whiteley.