super funds..??

[lasher]

who do you think offers the best deal as far as super funds go..

i am currently with AMP , have been for a number of years only because i have'nt really researched its competitors...

so who else is out there that can compete with AMP...

whats HESTA like...?

 

[rick James]

I work in the industry and have found it depends on how much money you have in your super, and who your financial adviser is.

Your best bet is to simply find a good financial adviser that will offer you low fee rates, as the majority of the funds are pretty comparable with investment options etc. And the adviser is primarily responsible for setting the fee rates.

Good Financial adviser = Good fee rates = more money


pretty simple imo. Things could change though shortly, so keep an eye on the Fin REview.

 

[Qsaint]

who do you think offers the best deal as far as super funds go..

i am currently with AMP , have been for a number of years only because i have'nt really researched its competitors...

so who else is out there that can compete with AMP...

whats HESTA like...?

Go to Comsec.com.au and compare a fair range of funds over a number of variables, they even refund most of the entry fees if you are comfortable not going to an advisor. The only problem with advisors is they tend to recommend (like any one else) funds that they make the most out of. More or less Perpetual and Colonial are doing the best out of the private funds, but Industry funds in a lot of cases do better than alot of private funds.

 

[morgoth]

I have a DIY, costs me about $1,000 a year, cheaper than a master trust etc. I do a lot of it myself as my background was super.

Manage the investments myself and all via the share market so no ongoing costs from that and I tend to buy and hold so no transaction costs (not that it costs me much anyway).

 

[Shinboners]

More or less Perpetual and Colonial are doing the best out of the private funds,

An important issue to check out are the entry/exit fees and the management expenses.

It's also worthwhile checking out Vanguard Investments and reading the information on their website www.vanguard.com.au. They run index funds, and that's a low cost alternative to the managed funds.

but Industry funds in a lot of cases do better than alot of private funds.

In regards to the industry funds, don't you have to be a member of that industry to be allowed to join the fund?

 

[1jasonoz]

Shinboners

In regards to the industry funds, don't you have to be a member of that industry to be allowed to join the fund?

Not any more, alot not most industry super funds have gone public offer, and allow anyone to join.

but Industry funds in a lot of cases do better than alot of private funds.

The figure is something like 7 of the top 10 ranks super funds in Australia are industry super funds, returning greater returns, cheaper fees, cheaper insurance than the for profit super schemes run by the commercial sector.

 

[rick James]

I repeat: finding a good financial adviser is far more important than finding a good fund. Unfortunately a good adviser is as rare as hen's teeth and the best one's usually only deal with high net worth clients.

 

[Leper]

Good Financial adviser = Good fee rates = more money

Whilst I can see the logic in this statement, I don't know if everyone is told you can join super funds without a financial adviser and therefore pay no fee on deposits. I aviod advisers as 99% of them are biased in some way or another.

In my case, I joined AMP fund (aussie share market fund) which has performed extremely well over the last 2 years (20% pa+ I think). All without any such advice - you just need to read the prospectus and make your own judgements IMO.

 

[1jasonoz]

Whilst I can see the logic in this statement, I don't know if everyone is told you can join super funds without a financial adviser and therefore pay no fee on deposits. I aviod advisers as 99% of them are biased in some way or another.

In my case, I joined AMP fund (aussie share market fund) which has performed extremely well over the last 2 years (20% pa+ I think). All without any such advice - you just need to read the prospectus and make your own judgements IMO.

Agreed. You don't need a financial advisor, if you already have a good super fund. Ive had more than a few mortgages with various banks, each time ive gotten the mortage, the banks have asked me to sit down with one of the inhouse advisors to access my financial position. Each time i have attended one of these meetings, had the advisors tell me about this product or that product, and the low fees i would pay. I then show them the industry super fund i'm in, the $300K life insurance policy i get for free from my fund, the free 2 years income protection policy i get from them, the low fees i pay, the higher rate of return i have been recieving then on each occasion the advisor has asked me if they could join my fund, as they can't provide anything within spitting distance.

 

[Leper]

Yep.

People who tell you that you need financial advisers are usually financial advisers themselves. I'm surprised people don't all see the bias in that.

Funnily enough none of the people who tell me I need to see a shrink are shrinks!

 

[morgoth]

If a financial advisor is chasing you chances are he is a shark. As someone said the good ones deal with high net worth clients and act on a referal basis only.

The guys at the banks are generally clowns, following a set script with set outcomes. Comm bank ends up suggesting a lot of Colonial funds, funny about that? NAB, MLC. If you reckon our fees are bad have a look at the US it is incredible, even their under-writing fees are higher than ours.

I also find it laughable that people think they get things for 'free'. No such thing, why would an insurer give you free life cover? You pay for it but in ways that you may not be aware. All corporate super funds have life and TPD cover and the permiums are paid for by the fundie from your returns/capital.

 

[rick James]

Whilst I can see the logic in this statement, I don't know if everyone is told you can join super funds without a financial adviser and therefore pay no fee on deposits. I aviod advisers as 99% of them are biased in some way or another.

In my case, I joined AMP fund (aussie share market fund) which has performed extremely well over the last 2 years (20% pa+ I think). All without any such advice - you just need to read the prospectus and make your own judgements IMO.

many of the better funds wil not allow you to join without a financial adviser actually. Especially boutique funds. some will allow you to remove the adviser once the account is established, but you will not be able to authorise any fund switching without one.

 

[1jasonoz]

many of the better funds wil not allow you to join without a financial adviser actually. Especially boutique funds. some will allow you to remove the adviser once the account is established, but you will not be able to authorise any fund switching without one.

many of the better funds

So what constitutes a "better fund"?

some will allow you to remove the adviser once the account is established

And they will hit you with hidden trailing fees for introducing you as a client to said fund.

but you will not be able to authorise any fund switching without one

So because you refuse to pay an advisor, you are refused the freedom of choice on were you money can and will be invested(tks for backing our statments that most advisors are a waste of money). I beleive this post below says it all;

Leper Yep.

People who tell you that you need financial advisers are usually financial advisers themselves. I'm surprised people don't all see the bias in that.

 

[morgoth]

My personal opinion of financial planners is that they are a jack of all trades, master of none! If you can't do it yourself, a good accountant and broker can crap all over them in terms of costs, results and service.

I get really annoyed about people paying 10 grand a year to a planner for 2 meetings a year and a couple of newsletters.

 

[rick James]

So what constitutes a "better fund"?

a better performing fund, of course

And they will hit you with hidden trailing fees for introducing you as a client to said fund.

once you remove an adviser, you remove thier ability to collect fees, so no. and iw as referring to the fund being able to allow you to remove your adviser, not the adviser allowing you to remove them


So because you refuse to pay an advisor, you are refused the freedom of choice on were you money can and will be invested(tks for backing our statments that most advisors are a waste of money).

that is correct, some funds operate in this way. And as I previously said, there are some very average advisers out there, but also some very good ones.

thanks.

 

[rick James]

My personal opinion of financial planners is that they are a jack of all trades, master of none! If you can't do it yourself, a good accountant and broker can crap all over them in terms of costs, results and service.

I get really annoyed about people paying 10 grand a year to a planner for 2 meetings a year and a couple of newsletters.

Actually recent legislation has been introduced to stop exactly that from happening. Many accountants are good with figures, but do not neccessarily ahve the reuqired knowledge to provide investment advice. Of course some accountants DO know investment options very well, which is why you should always ask if they are PS146 compliant. If they are, you know they ahve been trained in investment markets, if they are not, they are merely accountants.

If you are paying 10 grand to an adviser, you would have to have an account about the size of at least 1 million dollars. And if your adviser is not actively recommending new investments or monitoring your current ones, then you should be finding a better adviser.

 

[morgoth]

Try $500,000, the average total fee charged to a client is around 2%! 1% is the usual take by the underlying fund manager and the planner will take between 1% to 1.5% in a variety of forms.

There are exceptions but the stock standard planner in burbs will be around these levels. Anyone dealt with IPAC and how they charge?

Re your comments on legislation, clients still don't know what they are being charged and I meant the accountant does the tax/super structuring (hell at least they can actually give tax advise without 10 pages of disclaimers) and a broker to do the investments (who is licenced).

 

[rick James]

Try $500,000, the average total fee charged to a client is around 2%! 1% is the usual take by the underlying fund manager and the planner will take between 1% to 1.5% in a variety of forms.

Yep spot on, 2% overall, but the adviser would recieve 1%, the manager the other 1%. So I'm right. on a balance of $500,000.00 the adviser would get 5k.

There are exceptions but the stock standard planner in burbs will be around these levels. Anyone dealt with IPAC and how they charge? not with IPAC, no, why? What's thier fee structure like?

Re your comments on legislation, clients still don't know what they are being charged and I meant the accountant does the tax/super structuring (hell at least they can actually give tax advise without 10 pages of disclaimers) and a broker to do the investments (who is licenced).

Yep. but a good adviser shold be able to do it for cheaper... note... GOOD adviser. (which as stated earlier, are rare)

 

[1jasonoz]

thanks.

a better performing fund, of course

So you state that many of the better performing funds will not allow you to access them without an advisor? Well considering 7 out of the top 10 performing funds are Industry super funds, which most are public offer, this theory of yours is incorrect. Industry super funds have consitently outperformed retail/for profit schemes.

Oh and when you say better performing, is that before or after paying the higher fees that retail/for profit funds charge.

once you remove an adviser, you remove thier ability to collect fees, so no. and iw as referring to the fund being able to allow you to remove your adviser, not the adviser allowing you to remove them

Incorrect, there are many instances of people going to advisors, taking out 'X' recommended product from 'Y' company, then finding out that the advisor has a trailing fee clause, even though the ex-client hasn't seen them in years, then when the client attempts to leave this product, finding out the advisor has taken 'X' number of years worth of fees, due to them leaving the product early.

that is correct, some funds operate in this way. And as I previously said, there are some very average advisers out there, but also some very good ones.

So you beleive a fund is a good fund if it refuses customers the right to change schemes, without first paying an advisor? How is that good for customers?

Also i would say a very large majority of advisors are very ordinary, and in the cases i have dealt with them(approx 10-12 of them over the years), they have tried to offer me products i haven't wanted(more exspensive than i had in the first place), unsutable products, or in almost half the caes had them ask me if they could join my super fund!!!

 

[rick James]

So you state that many of the better performing funds will not allow you to access them without an advisor? Well considering 7 out of the top 10 performing funds are Industry super funds, which most are public offer, this theory of yours is incorrect. Industry super funds have consitently outperformed retail/for profit schemes.

Oh and when you say better performing, is that before or after paying the higher fees that retail/for profit funds charge.

That is correct, as in boutique funds, often operated by specific adviser dealer groups with specific clinet types in mind. And that is after MER's and Adviser fees


Incorrect, there are many instances of people going to advisors, taking out 'X' recommended product from 'Y' company, then finding out that the advisor has a trailing fee clause, even though the ex-client hasn't seen them in years, then when the client attempts to leave this product, finding out the advisor has taken 'X' number of years worth of fees, due to them leaving the product early.

By law an adviser needs to disclose any trail fees they will recieve UP FRONT before the client signs, in fact thier statement of advice needs to include a specific section detailing EVERY fee, commission or 'kick-back' the adviser will recieve. If you are stupid enough to go to an adviser who breaks the law, watch them break the law, and then sign up anyway, then of course you're going to get shafted. Same goes for early withdrawal fees


So you beleive a fund is a good fund if it refuses customers the right to change schemes, without first paying an advisor? How is that good for customers?

Because the fund is keeping admin costs down by having an adviser take care of the maintenance of the account under thier control. Thus reducing fees (in theory). What's good for customers depends on the customer, that's one of the first rules when looking at investment. remember, if you don't use an adviser, and your money goes completely down the toilet, there is noone to blame, no insurance to cover you, and noone else can take responsibility. Most funds allow a certin amouint of free investment switches (remember these things cost the funds money as well mate) per year, but the adviser would generally facilitate this.

Also i would say a very large majority of advisors are very ordinary, and in the cases i have dealt with them(approx 10-12 of them over the years), they have tried to offer me products i haven't wanted(more exspensive than i had in the first place), unsutable products, or in almost half the caes had them ask me if they could join my super fund!!!

Then I hope you were smart enough to not sign up with them. I'm not debating there are some shockers out there, the main reason is because the average age of a Financial adviser in Australia is about 55... they can't educate themselves anymore so they maintain bad habits. give it ten years and you will see a vastly different type of financial adviser in Australia. (as opposed to the current old insurance salesmen with a certificate)

 

[morgoth]

Rick

IPAC bundle the fee into an 'investment strategy'. They put a basket of fund managers into one and charge a fee between 2 to 2.5% (from memory), they also usually charge an admin/review fee on top. Some people pay 3% for not much.