Fees are Important

Detailed below are typical Fees charged by different Superfund Types.  While the figures are simply averages and will vary from Fund to Fund, the averages serve to demonstrate the marked difference in fees charged by different Superfund Types.

The most important conclusion to be drawn from the above table is that excluding SMSF's there is no limit to the annual fee payable with all Fund Types because the fee is percentage based.  The higher your Super Benefit the more the Fund charges in fees.  Consider that as your Super Benefit grows over your working life so does your fee.  Increasing your Super Benefit from $200,000 to $400,000 over your working life would see your fees double.  This means a standard Retail Fund would have increased its fee from $4,000 per annum to $8,000 per annum assuming an average 2% management fee.  Increase your Super Benefit further and the fees increase again.  ESUPERFUND's fee remains fixed at $699 irrespective of your Super Benefit.  The effect these fee differences have on your retirement benefit can be staggering.

One Collective Fee

In addition to providing a fixed fee option, a SMSF with ESUPERFUND also allows you to consolidate up to 4 of your family's super benefits into one Fund.  This also means that instead of each Member paying separate fees in their Fund, a SMSF will allow you to pay one collective fee for up to four members.  Based on ESUPERFUND's annual fee of $699 this equates to an annual fee of only $150 or $3 per week for each of the four members in the Fund.  This is as close to running your Super at no cost that you will find in the marketplace today.

Example:

So do Fees make that big a difference?  Let's consider an example.  Assume a husband and wife have $200,000 in combined super at present and are 40 years of age.  They earn $50,000 per annum each (increasing at 5% pa) and receive 9% superannuation contributions per annum.  Their Fund returns on average 7% per annum.  At age 65 their combined Super Benefit will be as follows:

Each half a percentage point rise in fees is reducing this couple's combined Super Benefit by almost $100,000 at retirement.  Fees count.  Let's now assume the same couple acted early and moved to a fixed rate fee by establishing their own SMSF with ESUPERFUND.  Based on our current fee, the cost of operating the SMSF would be a fee of $699.  Assuming this fee is indexed for inflation the same client's Super Benefit will have grown to in excess of $1,000,000.  Almost 50% or $330,000 more than the average Retail Fund that charges an average 2.0% per annum.  Fees count.

It's Never Too Late

It's never too late to move to a fixed fee SMSF option.  In fact it makes just as much sense for older Australians to establish a SMSF as it does for younger Australians who act early.  This is because older Australians tend to have accumulated more in super (in many cases $1.0 million plus) when they retire.  Based on this level of Super these clients are paying between $10,000 to $20,000 each year in annual fees (assuming a percentage based fee between 1% pa and 2% pa).  We think any logical person would agree that ESUPERFUND'S fixed fee of $699 is certainly a better proposition.  Our clients use the extra $10,000 to  $20,000 each year they save in fees to fund their own holiday, not the holidays of their advisors or Fund Managers.

Fees Count

The above table clearly demonstrates that from a fee perspective a SMSF can be an amazing vehicle to utilise to maximise your Super Benefit and your wealth in retirement.  In fact more than 2,000 Australians each month are now coming to realise this.  This is the amount of new SMSFs being created each and every month in Australia.  It is easy to understand why.