Average cost of super fund comprehensive advice – $2,000 - $2,500

15 April 2020

Superannuation funds can deliver comprehensive advice for an average of around $2,500 a member and intra-fund advice can be delivered for as little as three cents per member per year.

The financial adviser community has been granted a rare glimpse of what financial planning actually costs within superannuation fund structures, thanks of questions pursued via the House of Representatives Standing Committee on Economics Review of the Banks, Insurers and Superannuation funds.

An examination of answers provided to the committee by First State Super, HESTA and Equip Super has revealed that, in the case of First State Super, which no longer employs advisers directly under it license, it spent $1.9 million on the provision of intra-fund advice which equated to an average cost to members of 3 cents.

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This compares to Equip Super which estimated that the average cost of advice apportioned to individual fund members was $8.07 and HESTA which estimated the cost at being 1.19 cents per member.

HESTA revealed that the average per fund member cost of comprehensive advice in 2018/19 was $2,043 up from $1,9191 five years’ earlier.

HESTA said the cost of general advice in 2018-19 had been just over $4.3 million, equating to $5.17 per member.

First State Super made the point that it was no longer directly employing advisers but, in answer to question about the aggregate value of bonuses provided for intra-fund advice, and the average per adviser it provided the following table.

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Yes, a number of Union funds have outsourced the intrafund advisers to LINK & other organisations. But regardless how you spin it, the fact remains that members are paying for advice fees most are not receiving. It's still fees for no service, for most members.

$1.9M averages out to 3 cents per member? How many members do these funds have?

63 million... huh?

Would 3 cents per member PER WEEK be more accurate ???

Corrupt system. ASIC need to get their shit in order and stop this fee for no service, vertically aligned, conflicted and fee gouging rort!!

screeechhhhh... the spin machine is grinding to a halt!

How many members actually received advice for that $1.9M? It's not all of them. The super fund will need to refund fees for no service.

This actually opens up even more questions. We all know you only get what you pay for , right..!! The Teflon Industry funds keep dodging all this..! But, for how much longer can they get away for charging Fees for NO Service, even if they change the what they call it for accounting purposes.. More smoke and mirrors? BTW, are all these figures are old, past tense, before RC announcements before the follow on of addition compliance. Then begs the question, what was the quality of the advice like?? lol, a change from one tick a box selection on the inhouse APL product to another, on their risk profile menu.. please what BS. So, I'm thinking, and correct me if I'm wrong, but the cost for a comprehensive plan would actually now be double and some..! Due to all this BS that has gone on and I'm not talking 6 cents per member, more like starting at a basic $4,500 to $7,500 depending on the complexity in reality.

Does a bonus of $3,000 make the employee/adviser conflicted and potentially biased? ASIC could you pleaes comment on this?

Why do the fees vary so much with each fund? Are some of these funds hiding the costs of advice?

The fees are probably net of GST credit and 15% tax in super, as this is the way industry funds normally quote their fees and costs. If you gross up the $2,500 you are looking at more like $3,100, with the most recent 2018 figure going up to almost $4,700. Would be good if Money Management could check this and make a correction because that is a material difference.

I could deliver comprehensive advice for this amount as well - provided I knew ASIC was not looking over my shoulder. Any updates on the quality of super fund comprehensive advice from ASIC????

Are these figure quoted the "cost" or what in other words, what the Super trustee paid to deliver the advice? If so, what are the $$$ for the revenue collected via: -
1) Intra Fund Advice Fees
2) Direct Financial Planning Fees charged directly to the client/punter - and did it all come from the product?

While I'm thinking of it, I wonder what the % was of recommending the "in house product"????

The cost of advice quoted by any organisation that promotes inhouse products is not the real cost. It is a loss leader, cross subsidised by inhouse product revenue. It doesn't matter whether it's AMP, MLC, union funds, or accountants pushing SMSFs. Nor does it matter whether it's paid for by fees, commissions, or "intra fund advice". It's all conflicted inhouse product flogging camouflaged as advice, and consumers should steer well clear of it no matter what the cost.

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