Fees and costs

How do our fees compare to other funds?

1. Active management for improved performance
Many of the cheaper funds don’t select investments that they expect to perform well financially; rather they invest in a pool of shares without looking at each company’s financial credentials – this is called ‘passive’ funds management. In contrast, ‘active’ managers like Australian Ethical have higher fees because of the research and monitoring costs involved in selecting only the investments we expect will perform well financially.

2. Comprehensive ethical research
In addition to choosing the investments we expect to perform best financially, we undertake an additional layer of research to ensure each company we invest in passes our strict positive and negative ethical screens. We seek out positive investments that support people, quality and sustainability. We avoid investments that cause unnecessary harm to people, animals, society and environment.

Comparing fees vs Comparing performance

Many of the cheaper ‘passive’ funds’ advertisements are centred around their fees being lower.

We believe this can be misleading.

While it’s true that the amount of fees you pay will affect your retirement outcome, the fuller picture that will determine your total gain is net performance. So it makes sense to look at the return of your investment after fees have been taken out.

The performance figures on our website are all net performance – which is the performance result after fees have been taken out.

Example
Consider these 2 scenarios:

1) Fred has a balance of $10,000 at the start of the year. His fund charges fees of 2%, and the performance of his investment for the year is 8% gross of fees. The net performance is 6%, and he ends up with $10,600.

2) Mary has a balance of $10,000 at the start of the year. Her fund charges fees of 1%, and the performance of his investment for the year is 4% gross of fees. The net performance is 3%, and she ends up with $10,300.

These two scenarios illustrate that it’s not merely fees that matter, it’s net performance that will ultimately determine your retirement outcome.

 

What are the fees?

Below is an overview of the fees and costs that may be applicable to your super account with Australian Ethical.

You need to read our Super Product Disclosure Statement for the full list and explanation of fees and costs, as well as examples on how these fees and costs affect your investment.

Type of fee or cost Amount^ How and when paid
Investment fee Defensive 0.50% p.a. Investment fees are paid from the Fund’s assets prior to unit prices being calculated. The investment fee you pay will depend on the investment options you are invested in.
Conservative 0.65% p.a.
Balanced (accumulation) 0.72% p.a.
Balanced (pension) 0.75% p.a.
Growth 1.20% p.a
Advocacy 1.30% p.a.
International Shares 1.40% p.a.
Smaller Companies 1.25% p.a.
Administration fee $97* per annum, plus 0.41% of your account balance per annum. Dollar based fees are deducted from your account monthly. Percentage administration fees are paid from the Fund’s assets prior to unit prices being calculated.
Buy-sell spread Defensive 0.00% p.a. Applied to the unit price before processing each buy and sell transaction.
Conservative 0.05% p.a.
Balanced (accumulation) 0.15% p.a.
Balanced (pension) 0.15% p.a.
Growth 0.15% p.a
Advocacy 0.15% p.a.
International Shares 0.20% p.a.
Smaller Companies 0.15% p.a.
Switching fee Nil
Exit fee $50 Deducted from your account balance at the time of withdrawing either a full or partial benefit from your account.
Advice fee Nil Additional fees may be payable if a financial adviser is consulted.
Other fees and costs Nil
Indirect cost ratio Nil

^ The fees shown are current for the 2016/17 financial year and are subject to change.
* Your employer may be able to negotiate to pay lower administration fees. You may also be eligible for discounts if you have a large balance or are a member of an association. Refer to the Product Disclosure Statement for further information.
Other fees, such as activity fees, advice fees, advice fees for personal advice and insurance fees may also be charged. These fees will depend on the nature of the activity, advice or insurance chosen by you.
Insurance fees and other costs relating to insurance are set out in the Insurance Guide.
If you consult a financial adviser, additional fees may be payable to the adviser. You should refer to the adviser’s Statement of Advice for details.

Insurance Guide 30 June 2016

Type of fee or cost Definition
Activity fees A fee is an activity fee if:(a) the fee relates to costs incurred by the trustee of the superannuation entity that are directly related to an activity of the trustee:(i) that is engaged in at the request, or with the consent, of a member; or(ii) that relates to a member and is required by law; and(b) those costs are not otherwise charged as an administration fee, an investment fee, a buy/sell spread, a switching fee, an exit fee, an advice fee or an insurance fee.
Administration fees An administration fee is a fee that relates to the administration or operation of the superannuation entity and includes costs incurred by the trustee of the entity that:(a) relate to the administration or operation of the entity; and(b) are not otherwise charged as an investment fee, a buy/sell spread, a switching fee, an exit fee, an activity fee, an advice fee or an insurance fee.
Advice fees A fee is an advice fee if:(a) the fee relates directly to costs incurred by the trustee of the superannuation entity because of the provision of financial product advice to a member by:(i) a trustee of the entity; or(ii) another person acting as an employee of, or under an arrangement with, the trustee of the entity; and(b) those costs are not otherwise charged as an administration fee, an investment fee, a switching fee, an exit fee, an activity fee or an insurance fee.
Buy/sell spreads buy/sell spread is a fee to recover transaction costs incurred by the trustee of the superannuation entity in relation to the sale and purchase of assets of the entity.
Exit fees An exit fee is a fee to recover the costs of disposing of all or part of members’ interests in the superannuation entity.
Indirect cost ratio The indirect cost ratio (ICR) for a MySuper product or an investment option offered by a superannuation entity, is the ratio of the total of the indirect costs for the MySuper product or investment option, to the total average net assets of the superannuation entity attributed to the MySuper product or investment option.Note: A dollar-based fee deducted directly from a member’s account is not included in the indirect cost ratio.
Investment fees An investment fee is a fee that relates to the investment of the assets of a superannuation entity and includes:(a)  fees in payment for the exercise of care and expertise in the investment of those assets (including performance fees); and(b)  costs incurred by the trustee of the entity that:(i) relate to the investment of assets of the entity; and(ii) are not otherwise charged as an administration fee, a buy/sell spread, a switching fee, an exit fee, an activity fee, an advice fee or an insurance fee.
Switching fees switching fee is a fee to recover the costs of switching all or part of a member’s interest in the superannuation entity from one class of beneficial interest in the entity to another.

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