Fee-for-service works
Superworks Financial has launched an up-front fee option for their superannuation advisory services to meet customer demands for non-commission based advice.
Co-founder and managing director of Superworks Daniel Hicks said the fee-for-service option would give Australians access to expert and cost effective financial advice that would not eat into their super returns on an ongoing basis, as a commission-based service would.
“With fee-for-service advising, people can expect advice that is right for their needs, not advice that might be based on which fund pays the adviser the biggest commission,” he said.
According to Hicks, Superworks offers a selection of over 2,500 investment options from retail and industry funds and charges an up-front fee of $385 (and ongoing reviews from $99 per year), with no entry commissions and a cap on ongoing fund commissions of $75 a year.
“Individual’s with a high super balance will often take a fee-for-service option; upfront and ongoing fees amounting to thousands of dollars may be reasonable where you have several hundreds of thousands or more in super, but it doesn’t really make sense if your balance is $50,000 for example,” he said.
Hicks said Superworks kept costs low by focusing on superannuation and mainly interacting with clients via phone, e-mail and Internet. By not having face-to-face meetings they are able to keep their advising fees low, “as home or office consultations could take up to two hours of an adviser’s time and would inevitably add to the cost”.
“It’s important to note that whether due to high fees, inappropriate asset allocation or poor performance, a 1 per cent difference in annual returns could mean as much as 20 per cent less in your final super balance,” Hicks said.
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