YourShare Blog

"Shelf Fees" - What are they?

"Shelf fees" are the fees that fund managers pay wraps, master trusts and fund supermarkets for the opportunity to be included on their lists. As the number of funds grow, so does the competition for these funds to get clients in the door. Shelf fees are not illegal, but if the fund manager pay these fees it makes the costs of running their products more expensive and who do you think ends up paying this? The Investor!

The joint parliamentary committee on corporations and financial services has delivered a 266-page report arguing against the removal of commissions on super products but calling for greater transparency and the removal of shelf fees.

An article in the Financial Standard - Yes to commissions, no to shelf fees (8 August 2007)

...the committee took a much stronger line against shelf fees for investment menus, saying they could be “anti-competitive and may encourage products to be listed and subsequently recommended that may not be in the best interests of the client.”

So it will be interesting to see if this practice slows down, or if its just more storms in more tea cups!

Big increases in Super

An article in the age estimated that,

INVESTORS poured an estimated $10 billion into super funds over the past three months as they rushed to claim a Federal Government tax break that expired on June 30

This is as a result of the governments tax effectiveness incentive to shift up to $1 million to super before the June 30 2007 deadline. From 01/07/2007 the super contribution cap is set at $150,000 a year, or $450,000 over three years.

http://www.theage.com.au/news/business/10bn-rounds-off-a-super-year/2007/07/04/1183351290753.html

Adviser fees a mystery to many clients

In a recent article

Just 43% of investors said they understood their adviser’s fee structure “completely” or “fairly well,” according to a survey by Boston-based State Street Corp.’s investment management arm, and Knowledge@Wharton

http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20070611/FREE/70611005/1001

This article highlights why it is so important to understand what you are paying for your financial services, and what you are getting for these payments.

If you have any questions or need explanations of fees and commissions associated with any financial products, don't hesitate to contact YourShare on 1300 554 774.

The key is this is your money and your future.