YourShare Blog

Commissions and Superannuation

The ABC's 730 Report broadcast a story on 14.07.08 focussing on superannuation fees and commissions.

"A new report says super funds paid advisors almost $2.4 billion in commissions last year"

"The first thing to understand is that of that $2.4 billion paid in commissions, $860 million was paid on compulsory super contributions"

The report stated the average commission is 50 basis points or 0.5% of your funds total value each year .

For the full story follow the link http://www.abc.net.au/7.30/content/2008/s2303494.htm

Paying for brokers to get rich

An article in the Sunday Telegraph Jan 20th 2008, highlights the impact commissions have on your mortage;

"Brokers typically receive up-front commissions of around 0.65 per cent of the entire loan amount, followed by a so-called "trail'' commission of 0.20 per cent of the loan amount every year that the loan is in force"

Read the full article at http://www.news.com.au/business/money/story/0,25479,23080026-5013952,00.html

YourShare are working to be able to help clients claim back these commissions soon too.

It really is your money, make it work for YOU, not someone else

"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!

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.

Brokers who have a lend of you

Fees and commissions are also a bug bare in the mortgage sector.
In an article George Liondis writes;

What most people do not realise is the extent of the commissions that the banks and other lenders pay to brokers to recommend loans.
For the average-sized home loan in Australia of about $270,000, some lenders pay brokers more than $5000 up-front for every customer they bring in.
Others do not hand out as much upfront, but pay brokers a "trail" commission on the balance of the loan every year until it is paid off.

http://www.theage.com.au/news/money/brokers-who-have-a-lend-of-you/2006/02/18/1140151848926.html

YourShare are hoping to look into mortgage commissions to see if we can also help our clients get their fair share of these commissions back too.

Idle advisers find angry investors hot on their trail

This article was sent to us at YourShare. Its really relevant to why YourShare was created and the ethos we have created. YourShare is dedicated to 100% transparency in financial services and products.

Recent estimates put the amount of investors' cash that has found its way into pockets of idle financial planners at about $42 million, and the figure grows as monthly payments are dispensed without accountability to the recipients.

http://www.theage.com.au/news/Business/Idle-advisers-find-angry-investors-hot-on-their-trail/2005/03/24/1111525288598.html

Planners quizzed about charges

The debate continues over whether Financial Advisers should charge customers a set fee for their services (Fee-for-service) or a % of the clients investments.

The ongoing ‘fee for service’ debate is actively impacting financial planners, with research into financial planning dealer groups suggesting advisers are receiving more client questions about fees and charges.

Extract from: http://www.moneymanagement.com.au/Articles/Planners-quizzed-about-charges_0c04d750.html

Tags: superannuation, trailing+fees+and+commissions

Fees make a big differance

‘The 50 Crucial Answers You Need’ is a new pocket guide to savings and retirement.

In an extract from her book author Anna Lampe outlines the impact fees and commissions can have on your savings.

Then there are the layers of fees that are charged on retail funds, including contribution fees (which can be as much as 5 per cent), an adviser fee, an administration fee and a management fee. As Lampe says, fees that are charged on a percentage basis will increase in dollar terms as your fund balance grows.

Take, for example, an opening balance of $50,000 and a salary of $55,575 and management fees of 1 per cent a year. The end result is $359,000 over 30 years compared to $298,000 if the fees were 2 per cent a year instead.

http://www.smh.com.au/news/planning/top-tips-for-retirement/2007/06/18/1182019025723.html

Tags: managed+funds, fees+and+commissions, trailing+fees