ISA compares SMSF and industry fund fees

self-managed-super-funds/industry-super-funds/industry-super-australia/AIST/research-and-ratings/SMSFs/ATO/ASIC/industry-super-network/superannuation-trustees/australian-taxation-office/investments-commission/australian-securities-and-investments-commission/

19 November 2013
| By Staff |
image
image
expand image

Industry Super Australia (ISA) — formerly known as the Industry Super Network — has used new research to highlight fee disparity between self-managed super funds (SMSFs) and industry super funds.

In its recent submission to the Australian Securities and Investments Commission, ISA and the Australian Institute of Superannuation Trustees pointed to research using the Australian Taxation Office's data from more than 70,000 SMSFs over a three-year period to show costs associated with setting up and running an SMSF were much higher than previously estimated.

The smallest funds, with assets of up to $50,000, had costs on average of over 7 per cent per annum, while funds of between $50,000 and $100,000 had costs on average of 3.7 per cent.

Both sets of fees are much higher than a major not-for-profit fund which had costs of less than 1 per cent per annum, according to ISA chief economist Dr Sacha Vidler.

"Many SMSFs are established with small accounts, and their costs-to-earnings ratio are unacceptably high, especially when compared to industry and other not-for-profit funds," Vidler said.

"This new research shows that for all but the very largest of SMSF balances, industry funds are a more cost-effective option and also shows that two thirds of SMSFs have a very low level of diversification, with most assets in one asset class."

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months ago

Entireti has unveiled the new name for the AMP financial advice businesses that it acquired last year....

4 weeks 1 day ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

3 weeks ago

Minister for Financial Services, Stephen Jones, has provided further information about the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms....

1 week 6 days ago

TOP PERFORMING FUNDS