Industry funds not always cheapest
Industry superannuation funds cannot boast a consistent fee advantage over all retail master trusts and, where multi-manager platforms are concerned, may be more expensive.
That is the bottom line of data published this week by Melbourne-based research and broking house Lonsec as a result of a formal review of one of Australia’s largest industry funds, the Australian Retirement Fund (ARF).
While the Lonsec review gives ARF a favourable rating and has added the fund to its recommended list, it points out that, in regard to fees and depending on the investment option selected, investments in ARF attract management fees that range from 1.02 per cent and 1.18 per cent, which places them in excess of the Lonsec multi-manager universe average.
According to the Lonsec data, the advantage for members of funds such as ARF is that they do not have to pay platform fees.
Commenting on the outcome of the review, Lonsec’s general manager, research, Grant Kennaway, said he had been surprised by the fees comparison.
“I had expected that fees for industry funds would be significantly lower,” he said.
“But that expectation overlooks the fact that fees applying to multi-manager platforms are very competitive.”
Kennaway said that Lonsec had undertaken the research to help fill a gap in the information available to financial advisers and their clients and would be examining a number of other industry funds in the same vein.
Recommended for you
ASIC has permanently banned a former Perth adviser after he made “materially misleading” statements to induce investors.
The Financial Services and Credit Panel has made a written order to a relevant provider after it gave advice regarding non-concessional contributions.
With wealth management M&A appetite only growing stronger, Business Health has outlined the major considerations for buyers and sellers to prevent unintended misalignment between the parties.
Industry body SIAA has said the falling number of financial advisers in Australia is a key issue impacting the attractiveness and investor participation of both public and private markets.
