POWERED BY MOMENTUM MEDIA
Commissions only part of cost equation
 |
| Chris Butler
|
A key superannuation research house has released a new analysis which concludes that removing commissions from current superannuation products will not succeed in reducing average super fees below the Federal Government's proposed target of 1 per cent.
The Heron Partnership analysis covered 117 major retail and industry superannuation products and found that the current average fee was 1.27 per cent for an account balance of $50,000, 1.35 per cent for a balance of $25,000 and 1.22 per cent for a balance of $100,000.
Importantly, these fees excluded any fees paid for financial advice, it said.
Commenting on the analysis, Heron Partnership managing director Chris Butler said superannuation funds typically charged administration and investment fees, which varied from fund to fund depending on an individual's fund balance and investment structure.
"Of the 117 superannuation products analysed based on an account balance of $50,000, 68 funds would need to restructure their fees to be at 1 per cent or less," he said.
Butler said as a result of the various fee structures, there was a considerable difference between the retirement outcomes of the various products.
Further, he said only looking at costs or past investment returns would not be sufficient to select a super fund suitable for a person for up to 40 or more years.
"We therefore recommend that individuals seek advice from a financial planner to assist them in selecting the product that best suits their requirements," Butler said.
AUTHOR
Mike Taylor
Recommended for you
The central bank has served up a disappointment for punters on Melbourne Cup Day.
The superannuation industry will be judged by its member services rather than how effectively it accumulates wealth, according to Stephen Jones.
The profit-to-member super funds are officially operating as a merged entity, set to serve over half a million members.
Super Review announced 21 winners at the annual Super Fund of the Year Awards, including the recipient of the prestigious Fund of the Year Award.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
32.57 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
32.09 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
27.42 3 y p.a(%)
