Managed Funds Looking for new MF, without paying high Management Fees?

I have been thinking for a little while of opening a new account that offers a decent distribution as well as potential growth (wow.. bet you never heard that one! ) so i logged into my CFS account, and as im highly aware my CFS geared share fund has taken a hammering over the past 9 months or so, down maybe 30%? im only talking $5,000 or so, so its not that bad.. considering what it could've been.

Anyway, i remember when i first saw a financial advisor and asked which funds to invest in and he mentioned the CFS imputations fund is a good one to be involved in, and just as i was about to open a new account tonight in that fund, i noticed the 4% management fee for it! I was shocked! I am already paying 2% on the geared share fund which isnt doing me any favours at the moment, but i guess thats the risk im taking with the geared investment.

So, my question is... Has anyone got any suggestions for good imputation like funds (blue-chip / good dividend returns etc..) that don't charge an arm and a leg for management fees? I wouldnt say i am eductaed much in the funds and what not, and i dont even know if 2% for my current fund is high or not, or if i am over reacting, but any suggestions would be great thanks.

I read the BT group imputation fund is 5 star and has good reviews wherever i read.. Anyone know much about this one?

a CFS would be convenient as i can open a new account and keep all my details already with CFS, but if i have to look into a new company, so be it!

Thanks!

 

Yes, i must've been confused with the entry fee.. Thats what i meant

Is this a worthwhile fee to pay, do you think? at least its a one off.. But still, i tend to dive into things without asking these sorts of questions first, lol!

 

Crusher,

As Sim said, you can avoid paying the 4% entry fee by using a discount broker like InvestSmart.

Regards,

JR

 

Thanks guys, they are good points.

I have seen that invest-smart and got them to send me there package, but when i was looking at signing up, id have to sign a waiver to roll all of my current and future managed funds over to them?

 

I use InvestSmart and have certainly NOT signed any waiver saying I will roll all current or future managed funds over to them ...???

 

Try also looking at netwealth they allow you access to the wholesale fund version of those funds, which have lower fee's. But you will pay they a wrap service fee of 0.84% on top of the wholesale MER.

netwealth also wave the entry/exit fee's funds charge. netwealth will give you heaps more investment options than CFS, and provide a neat tax statement for all your fund and share transactions.

You will find that entering the fund at wholesale MER + netwealth fee, the overall fee still works out a little cheaper than going retail CFS with the bonus of allot more investment options.

also read through this presentation.. Presentations page I dug it up from a old thread here, and its a great read!

 

Another one to check out is YourShare - managed fund. As far as I can remember there was no waiver.

 

I have thrown out the information package from investSMART months ago, but from memory there was a heading within the application along the lines of "to benefit from the investSMART way to managed funds, all you have to do is roll any existing managed funds over to us and any future funds" .... seemed a little odd, has anyone else come across this?

 

with investsmart, I think its the first $400 of comissions they keep, and then any comission above that they give 1/2 back to you. once apona time before they were sold to fairfax, they gave everything back above $400.

Since most managed funds pay a trailing comission of about 0.5%, then if you have $100,000 invested with them, you will get $50 per year back.. waste of time really..

 

You may like to check out a group called iRefund. They don't charge entry fees and also refund the trailing commissons as well - i think they split the first $700 50/50 and then refund 100% of the rest.

Cheers
aog

 

Is there any disadvantage to using a mob like this, or investsmart, or any of these refund-based guys, as broker for your personal super on the basis that at worst there'll be no change and at least there's a chance of getting something back (and something is better than nothing)?

 

Thudd, The way I see it - someone is going to get the trailing commissions on my super, managed funds & insurance policy. It may as well be me. Also it is dead easy to make iRefund or investmart or whoever the broker (it literally takes about 3 mins to fill out their form and fax it off) and it is adds up to be alot of cash. I can tell you it sure is nice getting a cheque in the mail for $1,950 for doing nothing and when its not expected - I went to Bali for 2weeks on it.
AOG

 

Hi Crusher

I work at InvestSMART - a discount fund broker.

You can eliminate the 4% entry/contribution fee by using a discount fund broker like InvestSMART. They rebate 100% of entry fees.

Plus you will also be able to reduce your management fee/MER if the trailing commission proportion of your MER exceeds $300 per year. You will receive 50% of the trailing commissions above $300. For more information visit the InvestSMART website.

Yours sincerely

Jess

 

compare to yourshare.com.au

 

yourshare is better than investsmart.

 

Thank you for your replies.

We at InvestSMART understand that there are competitors in the market place now and in the future. We will always try to match our competitors, but sometimes it is hard to be something for everyone. So if you would like to contact us directly at InvestSMART we are happy to negotiate potential cash back on trailing commissions according to your situation.

We believe we have a fantastic discount managed funds program and especially as we are now backed by Fairfax even in a bear market can continue to deliver on our promises of cash back.

Thank you

Jess - InvestSMART

 

You would think this would happen independent of the market since these companies are basically taking a cut of the trailing fee and handing back the rest. Why would the the state of the market would have any impact on this?