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Moving to low cost super fund

Discussion in 'Superannuation, SMSF & Personal Insurance' started by NoAssets, 10th Aug, 2019.

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  1. NoAssets

    NoAssets Member

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    10th Nov, 2012
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    sydney,nsw
    Hi All,

    I just finished reading Barefoot Investor. First action for me is to move away of the existing expensive super fund - MLC MasterKey Business Super (myself) and AMP (wife). Both me and wife are near 40 now and started thinking building retirement kitty.

    My questions.

    1. My and my wife;s employer pays life insurance with the existing super fund. So i might still have to keep MLC/AMP? Should i re-direct funds from MLC/AMP to Hostplus at regular intervals after employer pays into it?

    2. Is Hostplus Indexed Balanced Fund still a best bet ?

    3. Can you combine wife and your super into 1 fund and save monies on fees?

    MLC MasterKey Business Super FEES
    Investment fees 0.46% pa
    PLUS Administration fees1 0.51% pa + $78 pa
    PLUS Estimated indirect costs for the superannuation product - 0.33% pa

    Cheers,
    MKB
     
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  2. twisted strategies

    twisted strategies Well-Known Member

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    does either Super fund perform well enough to justify the fees charged ???

    if one is ACTUALLY giving you say 10% ( after fees and charges and insurance ) on a regular basis ( you can't expect that every year .. but say 8 out of 10 ) you might still be doing very nicely , and should leave that fund in your list of options

    in the pursuit of low fees many decide to go with passive index funds ( i hold VAS , but that was timing , several rivals would have strong claims if i was buying them in the next 12 months )

    and while i hold VAS i also hold some conservatively run LICs ( SOL and BKI ) , but there are some rivals that would be performng equally well at the moment .( and i am eyieing them as potential additions )

    the reasoning behind the LICs is they will actively resist losing money for the unit-holders in downturns whereas an index fumd tracks the market ( for better or worse )

    although i don't have a formal super fund , would a SMSF or trust structure suit you better and the just buy the insurance policies required seperately .

    if you have an accountant, have you floated these ideas with him/her , tax implications could be the important factor here
     
  3. Hodor

    Hodor Well-Known Member

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    hodor
    My employer pays death and disability life insurance through a super fund. When I moved to another they continue to pay the cost of the insurance with the original provider.

    They would be one of the best still. Australian super and Sun super also consistently rate highly, among others.
     
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  4. RS Gumby

    RS Gumby Well-Known Member

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    Australia
    I'm in Hostplus Balanced as I'm moving toward retirement. Their performance over the past year hasn't been great but over the last 5 years they've been the best according to Money magazine
     
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  5. goponcho

    goponcho Active Member

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    Perth
    Regarding low cost super funds i have been doing some research recently too.
    Am looking to minimise costs as have very little (0) faith in active management - in order to do this i want to essentially put everything into 2-3 basic ETFs - majority ASX based with maybe a small USA/international component.

    So from what i have read about hostplus & their fees:
    - Hostplus Index Balanced is $78pa admin +0.02% investment fees +0.05% indirect costs
    - Hostplus Choiceplus is $78pa admin then only 0.11% for buy/sell brokerage fees for transactions about $27500. Plus there is an inbuilt cost into the ETFs (eg 0.1% for VAS) but Hostplus dont charge any more above this.

    My question is wouldnt Choiceplus be vastly cheaper if we only sell very rarely??

    The main limitation i have found with Choiceplus is that it limits us to 80% in individual equities, and so would nee 20% in one of their funds - am trying to look at other options to get aroudn this.
     
  6. Hodor

    Hodor Well-Known Member

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    It's $15 a month per their website.

    So the admin is higher and VAS has a higher MER than the balanced option. So not vastly cheaper and more expensive per your example.
     
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  7. goponcho

    goponcho Active Member

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    Hi Hodor,
    Have just double checked the PDS you are correct - i missed that.
    $1.50/week general admin fee + $15/month for Choiceplus = $250 yearly admin fee.

    Despite this, with a large portfolio this will become a minor factor.
    My query was with Choicesplus you only seem to get charged when you make a transaction, so if he buy and hold for long periods, the overall costs would be quite small vs a yearly % of assets.?

    Regarding the MER for VAS - I'm not sure, but if a portfolio manager is choosing assets with the Balanced fund, they would have layered costs as they may hold funds also, so i think its reasonable to ignore it in the comparison? (I probably shouldnt have mentioned it then)

    Thanks
     
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