Comments for SuperGuide.com.au

Comment on Comparing super funds: Check out the cheapest funds by dana

dana — Wed, 01 Feb 2012 22:45:10 +0000

Hi Karen,
I’m about to leave Unisuper (mer of 0.61% – on average for high growth option) for Frist State Super purely based on fees. Is the MER likely to stay below the 0.61% for the next two to three years? As this is the main reason im joining the fund.

Thanks,
Dana

Comment on Top 10 performing super funds for 2011 calendar year by Stan

Stan — Wed, 01 Feb 2012 12:04:12 +0000

AlanM, you should check the Industry Super Funds if you want to see who are the worst performers. There has been a run on Australian Super in recent months. They have a problem with “unlisted assets” which APRA exempt them from reporting on.

Comment on THE SOAPBOX: Not the time to quibble (financial advice) by Bob

Bob — Wed, 01 Feb 2012 01:41:13 +0000

I am a Financial Planner accredited by a large organisation. I run my own business and charge clients on a fee-for-service principle.
I would like you to consider an example:
I recently had a client who had 3 super funds ( 1 industry, 2 retail), 44 y.o., married, 2 kids, mortgage…
Client was after a consolidation of his superannuation funds and review of insurance needs …
Seems like a fairly standard situation, so how much would you expect to pay for such a service? $200, $400, $1000 ???

Now consider this:
I had to spend time and money on advertising for that client to come into the door. (roughly $100 per client + 1 hour of work).
Once the client comes I spend about 2 hours initial to understand the client and their situation. Even if the advice that I am giving only relates to a particular area, I need to be aware of the whole situation as doing something “here” can have significant implications “there”.
I now need to photocopy documents, and prepare letters for super funds (ink + 3x registered post letters = roughly $20 + 1 hour)
A couple of days later I would need to contact each fund and learn the latest information about the client on each of their accounts (fees, investment structures, insurances, beneficiaries … what can and can not be done in their fund etc… and no, it is not the same for each client even if they all have the same fund – there are different arrangements with various employers etc, so you never know what you will find until you ask). (2 hours for 3 funds)
I now have to consider the information in light of clients situation and decide what is the best for the client (fund + insurance(inside/outside the fund) + fees, what the client is striving to achieve … ) this takes about 3 hours + as I have to run insurance quotes and other comparisons…
I then prepare a request for paraplanner (people that type up a document called Statement of Advice (SoA), as they will do it quicker than I will) 1 hour + $450 paraplanning cost.
A few days later I would receive back the written SoA (roughly 50-70 pages as that is what the legislation dictates) and need to check it. 1 hour.
In good will that the client will proceed with my recommendations I would now prepare all the applications forms associated with the advice (2 hours)
Then I would meet with the client again and spend another 2 hours going through and explaining the advice and signing all the application forms.
I then have to send the application forms to relevant organisations and then monitor the implementation (for example insurances and when money comes in) and report back to client on progress. (2 hours + $20 postage + printing costs)
It costs me $800 a week to keep my office (rent + electricity + phone + internet + cleaning etc), so if I am spending 20 hours in a 40 hour week on a client, then add another $400
Now, on top of that for me to upkeep my education I need to do 40 hours a year (minimum)
I also pay Indemnity insurance costs (over $4000/ year), licencing fee (that gives me access to a lot of research such as Chant West and allows use of other tools (such as client software) I estimate these costs to be $200/per client per year
There is also a time cost associated with running a business (roughly 20% of my time), so I need to consider that as well …
Even if the client never wants to see me again, the legislation also states that I need to keep their file for 7 years. In case you never want to speak to me again I still need to attempt to contact you at least once a year and offer to review your circumstances, document that you have refused it (if you never want to see me again). I have to either consider this cost up front (that is I think where the figure of 30% comes from) or hope for the best for the future.

So now the question is, if you were a financial planner such as myself, what would you charge your clients?

Comment on For your convenience: Income tax rates for the 2011/2012 year by Norm Scott

Norm Scott — Tue, 31 Jan 2012 21:36:35 +0000

Thank you for very clearly explained information especially re non-tax-deductibility of super contributions for 75+ years of age and also the tax rates and LITO for 2011/2012.

Comment on Should we transfer our super to a bank account to avoid fees? by amcoz

amcoz — Tue, 31 Jan 2012 07:12:08 +0000

As a matter of feedback, I have been helping my neighbour come to grips with a web of loosely controlled financial matters after her husband died last November. One thing that caught my eye: I was absolutely staggered that they each had a small industry-managed super account around $130k – initial investment July 2007 was $190k – with ‘fees’ amounting to nearly $4k on each account!

I understood that she could have had an unearned, non-taxable income of around $30k simply by banking her cash and super funds in term deposits as might have been more appropriate to a couple in their mid to late 60′s and now, as a 71 year old widow, who had at least $2M in the home she would sell one day if she needed any money to live on. I understand she’s banked half the super funds but – surprise, surprise – her FA said she’ll have lost forever the capital reduction from the initial investment. I told her quite bluntly, she would have been better off sticking the original funds in the bank as your example above would have been their best option for their stage in life.

Please keep up the good work, Trish.

She thanked me for my help and now wonders how the FA could possibly justify her ‘advice’ as it hasn’t added any value to the initial investments. It seems to me that the ‘advice’ had only one purpose, and that was, to support the FA (which, unfortunately, could be taken to mean something akin to making love to everyone).

Comment on Asset classes: Naming the investment winners for the 2011 calendar year by Robear

Robear — Tue, 31 Jan 2012 07:01:40 +0000

What about Gold?

I only have figures for 8 years on the Gold ETF but here is what I come up with. On the 2/1/2004 the closing price was $55.23 and on the 2/1/2012 the close was $151.88.

By my reckoning thats a compound return of 13.4%. I’m very happy with my gold investments.

Comment on Top 10 performing super funds for 2011 calendar year by AlanM

AlanM — Tue, 31 Jan 2012 05:45:14 +0000

I suspect most of those poor performing funds that won’t provide info are in the retail sector. Makes sense I suppose because that’s their business – wealth transfer and erosion of working Australian’s retirement savings.

Comment on Top 10 performing super funds for 2011 calendar year by Trish Power

Trish Power — Tue, 31 Jan 2012 04:32:03 +0000

Hi Marc
Thanks for your comments. I have requested the poor performing fund figures from several sources and no one is willing to release that information. Occasionally that type of information is leaked and, when that occurs, you may be able to read it in one of the daily newspapers.
Regards
Trish

Comment on THE SOAPBOX exclusive: Only 7 truly independent financial advisers in Australia by Ralph Creswell

Ralph Creswell — Tue, 31 Jan 2012 01:30:19 +0000

Dear Trish.
I add my compliments to the hundreds of others you have already earned for presenting the facts about investing in easy to understand terms.
As finanicial lay persons my wife and I had a long-term (20 years plus) ‘relationship’ with our former financial adviser. On receipt of an inheritance in 2006 we naturally trusted him to invest it on our behalf along with my super only. We have since been financially ruined. Our case has been before the Financial Ombudsman now for three years. We paid both an up front fee for advice as well as platform fees, trailing commissions and probably other fees which were listed in the advisers PDS but in such a way (we claim) as to disguise their totality over a time frame. In 2006 one simple bit of advice would have saved both our money and much heartache. That is: ‘The market in 2006 is currently trading well above the historical trend line. This line shows the increase in the value of the stockmarket from 1900 to now. History shows this trend will not continue. I recommend you stay in cash until such time as the market returns to the trend line and then invest. Yes, you will pay more tax now. Yes, you may not pick the bottom of the market. But this historical graph proves that your losses or gains will be moderated. No, I will not get paid any commissions for this advice but I will ultimately gain by keeping you as a long term client’.
The comments by non independent financial advisers regarding their client’s unwillingness to pay high hourly fees are valid. However those same advisers will have to work hard to prove they are worthy of those fees, hidden or not. It is an immutable proven fact that no investor or adviser can consistently out perform the market. All we sought to do was to maintain our wealth in relation to inflation. i.e. “we are not greedy”. We even printed this comment on our risk profile prior to entrusting our funds. Clearly it was ignored as our adviser sought to maximise his and his company’s earnings. To this day he protests his strategy was correct despite our computer tracking showing ongoing losses on our former investments. Several of our former investments were in sub prime mortgage schemes and here too he maintains they were not, despite being forced to admit this by the Ombudsman’s investigations and subsequent interim comments. As Lord Rothschild said: “It takes a lot of skill to accumulate weath but ten times as much to keep it”. My advice, avoid financial planners. There is enough free information on the internet for most lay people to invest their funds conservatively. Sure you may only retire comfortably, but surely that is better than relying on the aged pension. Ralph Creswell

Comment on Top 10 performing super funds for 2011 calendar year by Marc

Marc — Mon, 30 Jan 2012 22:52:05 +0000

I’d like to see the worst performing funds too

Comment on Help! Where did my employer pay my Superannuation Guarantee contributions? by Peter

Peter — Fri, 27 Jan 2012 23:34:35 +0000

Can someone explain why the employer NO LONG is required to supply their employees with any form of notification of what they have paid into the employees fund, and when.
It seems it is up to the employee to have to wait till he receives a statement from his fund (sometimes only annual),
Personally we had a change of paymaster and he backdated a correction to our super and deducted it for the past year, no one was aware of what he had done for almost a yr until we received our statements, when asked he Quoted they are no long legally obliged to supply us with details of what they pay and when, and after checking this is right, WHY is it.
Also our payments are (supposedly) made by our employer on the 28th of each month they are due( as is the law) but the funds do not show the payments as being in their accounts for weeks after this, When I questioned my employer I was told it was because I was not with “His fund” and it took longer, or it was my funds fault. Does it have to be paid into MY fund within the 28 days or simply paid (posted off with an Aust Post receipt as proof of doing it