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.
Our fees are generally competitive among other ‘actively managed’ retail funds, yet higher than industry and ‘passively managed’ funds. There are good reasons for this:
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.
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.
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.
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.|
|Balanced (accumulation)||0.64% p.a.|
|Balanced (pension)||0.67% p.a.|
|International Shares||1.40% p.a.|
|Australian Shares||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%||Applied to the unit price before processing each buy and sell transaction.|
|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||Refer to the Additional explanation of fees and costs for more information.|
|Indirect cost ratio||Australian Shares 0.07%+
All other options Nil^
|Indirect costs are deducted from the Fund’s assets, or assets of interposed vehicles, before the unit price is calculated.|
^ The fees shown are current for the 2017/18 financial year and are subject to change. Further information and definitions of the fees can be found here.
* 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.
@ You may incur a buy-sell spread whenever units are bought or sold including by way of switching. However, you won’t be charged a switching fee in addition to the buy-sell spread.
+ In the 2016/2017 year brokerage costs amounting to 0.07% were incurred in the Australian Shares investment option which were not fully recovered through the buy-sell spread. This means that for the 2016/2017 year the ICR was 0.07%. The estimate for the 2017/2018 year is also 0.07%.
^ Whilst the indirect costs for 2016-2017 for each investment option (other than the Australian Shares option) was nil, as certain fees and costs will be incurred for external asset managers 2017-2018, the indirect cost ratio for 2017-2018 is estimated to be 0.02% for Conservative, 0.08% for Balanced, 0.15% for Growth. All other options are estimated as nil for the 2017-2018 period.
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.
|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 that relate to that administration or operation, other than:
(a) borrowing costs; and
(b) indirect costs that are not paid out of the superannuation entity that the trustee has elected in writing will be treated as indirect costs and not fees, incurred by the trustee of the entity or in an interposed vehicle or derivative financial product; and
(c) costs that are 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||A 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 fee deducted from a member’s account or paid out of the superannuation entity is not an indirect cost.
|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 that relate to the investment of assets of the entity, other than:
(i) borrowing costs; and
(ii) indirect costs that are not paid out of the superannuation entity that the trustee has elected in writing will be treated as indirect costs and not fees, incurred by the trustee of the entity or in an interposed vehicle or derivative financial product; and
(iii) costs that are 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|| A switching fee:
(a) for a MySuper product—is a fee to recover the costs of switching all or part of a member’s interest in a superannuation entity from one class of beneficial interest in the entity to another; or
(b) for a superannuation product other than a MySuper product—means a fee to recover the costs of switching all or part of a member’s interest in the superannuation entity from one investment option or product in the entity to another;
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