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Fee type |
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Who gets it |
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Description |
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What's normal |
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Contribution fees |
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Your financial adviser or the super fund |
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These are fees charged as a percentage of what you contribute into your super fund each time you make a payment.
These fees can be called different things but look for words like entry fees, contribution fees, deposit fees, establishment fees, rollover fees. |
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Individual investors can pay contribution fees of up to 5% of each contribution though most consumers pay only around 2-3% on average.
But if you join a corporate master trust or an industry fund your contribution fee can drop to zero or sometimes just 1%. |
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Termination fees |
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The super fund |
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These are fees you pay to leave, exit or withdraw money from the super fund.
If you want to swap from one fund to another and the fund you want to leave charges a percentage type exit fee, say 3%, then this should be thought of as a de facto entry fee to the new fund. |
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Most modern funds now charge only very low getting-out fees of around $30-80, which really is not much more than the cost of a bank cheque.
Be wary of any fund that charges exit fees as a percentage of your account balance.
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Ongoing fees |
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The super fund |
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These are fees charged as a percentage of your account balance each year. They are effectively the fee you pay to stay in the fund.
These fees can be called different things but look for words like administration fees (where these are charged as percentages), asset administration fees, trustee fees, expense fees, expense re-imbursement fees, consulting fees.
Sometimes there are several types of these fees charged by your super fund and you have to add them all up to give you a single figure.
Also, these fees sometimes reduce as you have more in your account, e.g. your fund may charge tiered fees. |
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On average, 1.5% of your account balance for individual investors. Please understand that these fees do not normally include any investment fees.
If you join a corporate master trust your ongoing fee can drop much lower depending upon the size of your super account balance or the number of employees in your company that are with the super fund. Eg, some corporate master trusts have ongoing fees as low as 0.2% which makes them nearly as cheap as most industry funds.
Not for profit funds, eg industry funds, generally do not charge ongoing fees.
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Member fees |
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The super fund |
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These are account keeping or book keeping fees charged by your super fund.
These fees can be called different things but look for words like policy fees, account keeping fees, or administration charges (if you are with an industry fund). |
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Usually around $1.00 per week.
If you are in a corporate master trust this fee can reduce substantially or be waived completely if your super account is big enough or the number of employees in your company that are with the super fund is large enough. |
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Investment fees |
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Fund manager(s) |
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These are fees paid to the fund managers to look after your super fund’s investments. These fees are charged as a percentage of your account balance.
If your super fund manages its own investments, sometimes the investment fee is bundled with the ongoing fees and so it can seem large. |
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Usually around 0.80% of your account balance for balanced investment options.
However, more complex investments usually have higher the investment fees. Eg, investment fees for international shares are higher than for Australian bonds.
Some not for profit funds, like industry funds, don't always declare their investment fees. But they are there and you should ask them about it. Be suspicious of any fund that says they don't have investment these fees because it means they aren't following the fee disclosure rules and that should sound alarm bells. |
