Australian advisor fees on super wrap products...

[MammaStash]

Hi Aussies ... I hope someone can give me a number I should be aiming for ... Meeting w advisor in a few days and want to get lower fees. I have the BT super wrap and will be moving my super out of cash (don't ask ... Massive punch in face for me!) ... And into some of the vanguard or other low fee index funds. But to follow the low fee thing I don't want to pay the advisor big fees just for the privilege of access of the platform. Any tips?

[Notch]

How'd you go?  I would have just dropped the adviser/super company for something like ING Direct.

[kaetana]

I second Notch-- I personally don't believe an advisor is necessary, but obviously your own circumstances may differ. I would also have gone with either ING Direct or Australian Super (my current fund), both of which allow you to buy Exchange Traded Funds. Of the two, ING Direct offers the Vanguard ETFs.

[kingma15]

I will have to look into the ing direct accounts. I already bank with them and find them to be quite good.

[deborah]

Industry based funds tend to be cheaper - Australian Super is an industry fund (I also used to be with them, and was happy with them) - I assume that ING is not. And, WRAPs tend to be some of the more expensive super products. When I was with them Australian Super offered Vanguard, and it was their cheapest offering (they charged different fees for different offerings). I was really impressed about how easily I could change between offerings.

I was with them because my work didn't include my other super funds in their list of funds for Salary Sacrifice. Once I retired, I no longer needed to be in so many funds.

[kaetana]

When I was with them Australian Super offered Vanguard, and it was their cheapest offering (they charged different fees for different offerings). I was really impressed about how easily I could change between offerings.

Unfortunately, Australian Super definitely doesn't offer Vanguard anymore - otherwise I would have some! They do still have a lot of good options though.

[marty998]

I'm with Aus Super. Little bit pissed with them as they have increased insurance premiums for Death, TPD and income protection by about 30%(!) this month. I promptly dropped my cover a notch, thus further contributing to the underinsurance problem in Australia where there are not enough people who are "good risks" cross subsidising people who are "bad risks".

The Aus Super investment options are varied enough, but I am simply split between the balanced and sustainable balanced options. No reason to change as I've been pretty happy with the returns, even though the REST super options have done 2-3% better over the past year.

Wraps are really just a fancy way for a planner, dealer group, bank and fund manager to take money from you multiple ways. Most do what is intended (give you access to managed funds you would otherwise not be able to access), but obviously there are cheaper more efficient ways of investing.

[kaetana]

I'm with Aus Super. Little bit pissed with them as they have increased insurance premiums for Death, TPD and income protection by about 30%(!) this month. I promptly dropped my cover a notch, thus further contributing to the underinsurance problem in Australia where there are not enough people who are "good risks" cross subsidising people who are "bad risks".

I did the same! I lowered my Death insurance, removed the other two altogether, and redid my will to reflect the changes. The increase was ridiculous!

[MammaStash]

late reply by me... end result is I think they are way too expensive. I'm going to switch to INGDirect Super.  The reductions in fees alone will help. I also discovered ING does the Vanguard ETFs so that's looking good. Just a bit more on fees since it's basically a brokerage fee per tx. So a few more things to figure out but that's where I'll shift it all.

Agree with Marty re the Wraps ... fancy way to charge fees!

[marty998]

Hello, welcome back. Good to see you are switching and taking control of your Super and how it is managed.

[Ozstache]

I'm late to the party here, but Sunsuper is another option for an industry fund that offers low fee share index fund super. Unfortunately, they don't offer Vanguard but the one they do use (SSgA) has similar performance and fees. I considered the Australian Super option but found there is a limit to what % of your overall super you can have in one fund, even index funds. Sunsuper has no such limitation, so I went with them.

FWIW, I was originally going to put my entire super payout from my 30 year job into the share index, but I chickened out and went the balanced fund for now. I did this because I am concerned the market is currently high and I don't need to invest aggressively to get the return I need to support my annual expenses anyway (7.4% pa return over the last 10 years is more than good enough for me). If the market corrects 20% or more, I will move some funds into the share index fund.