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Need advise on Industry Fund

Discussion in 'Superannuation, SMSF & Personal Insurance' started by tropic, 20th Oct, 2008.

  1. tropic

    tropic Well-Known Member

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    WA
    I want to move my super from Perpetual trustees to an Industry Fund.
    Since the performance between industry funds and the commercial funds are on par and Industry fund fees are a lot lower it's time to do something about it.

    Can anyone recommend a good industry fund?
    Where is the best website to check comparison between funds?

    Thanks.
     
  2. AsxBroker

    AsxBroker Well-Known Member

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    Advice

    Hi Tropic,

    Anyone who gives you advice would not be taking into account your personal situation and could be liable for super switching advice without a reasonable basis.

    If the returns are the same why would you move? Fees are usually taken out BEFORE the stated returns, so the fund quotes to you the net return.

    Cheers,

    Dan

    PS Before making a superannuation decision speak to your FPA registered Financial Planner.
     
  3. tropic

    tropic Well-Known Member

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    WA
    Thanks Dan.

    I've been under the impression that Industry funds (some of them) have better return then commercial super funds partly because the charge less fees.
     
  4. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    That's largely a myth encouraged by the industry funds as part of their marketing campaign.

    You need to look at the bigger picture - as AsxBroker mentioned, returns are usually quoted after fees are already taken out, so fees doesn't actually come into it if one fund consistently performs better than the other.

    I'm not suggesting Industry funds aren't worthwhile ... but don't move just because of fees.

    Which is better:

    Investment A) returning 10%pa nett with 1% fee

    Investment B) returning 14%pa nett with 2% fee

    ??

    (Answer: investment B is has higher returns even after fees are taken out !! Whether that makes it a better investment for you depends on a lot of things - averages can be misleading and volatility is something that should be taken into account as well as currency exposure, tax effectiveness, etc etc)
     
  5. Waimate01

    Waimate01 Well-Known Member

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    Encouraged by industry funds.... but confirmed by APRA:

    Industry funds on top in super great debate - Investment - Money - Business

    For those who don't know, the Australian Prudential Regulation Authority (APRA) is a statutory authority, and the prudential regulator of the Australian financial services industry. As such they have no barrow to push and it's reasonable to assume they're telling it straight.

    People who put their hand out for managing your money would have you believe they add some value, yet the facts frequently don't agree. IMO, a large chunk of the financial services industry is a scam. You heard it here first :D
     
  6. AsxBroker

    AsxBroker Well-Known Member

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    Hi Waimate,

    Those surveys are very general and subjective, which don't take into account the net member benefit that the member receives from advice on things like transition to retirement, salary sacrificing, government co-contribution and asset allocation, as well as the SANF for clients.

    A usual miscalculation which throws out the return numbers is that for the retail funds they automatically assume a member is being charged a 4.5% entry fee.

    Another comparison, a client in a wrap account which doesn't charge any fees on cash and returns 6% pa in the last 07/08 year, a LARGE industry fund reports a return of 5.12% pa on their cash fund for the same period 07/08.

    Cheers,

    Dan
     
  7. tropic

    tropic Well-Known Member

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    How can the public find out the true pictures of what is going on?
    Maybe I'll move my to an industry fund and leave my wife's with perpetual trustees.
     
  8. Rob G.

    Rob G. Well-Known Member

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    Melbourne, VIC
    Basically you need to compare funds with similar services.

    Industry funds don't usually provide boutique services, but you would expect to pay significant premiums for these options.

    However, Industry funds are starting to allow members a limited choice in optional services, at extra cost.

    But it still appears clear to me that for a basic super membership, fees are a lot lower.

    There has been complaints that retail funds actually pass a lot of services onto related parties at cosy markups !!!

    You have to ask yourself what value you are getting for your fees and whether some of these options are really useful to you.

    So much for disclosure rules to make this easy !!!

    Cheers,

    Rob
     
  9. AsxBroker

    AsxBroker Well-Known Member

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    I strongly agree with Rob to the value of what you are getting for your fees in a superfund. If you don't like it, find another one, there are hundreds of them out there.