‘Are my pension fund fees too high?’

Mike asks personal finance guru Noel Whittaker if his pension fund fees are too high.

Mike is concerned that the fees he is paying on his pension fund for advice and administration are over the odds and asks personal finance guru Noel Whittaker for his view.


Q. Mike*

I have an accumulation pension fund of $216,000 solely invested in Australian shares for the purpose of earning franked dividend income.

The fees for my account over the past financial year totalled $3236, comprising: administration fees $1068, advice fees $1810, brokerage $274 and regulatory fees $84.

For these fees I received an annual report and an annual meeting with my adviser as well as electronic access to my account, and the payment of my minimum pension.

But $2900 for administration and advice, although only 1.34 per cent of the total fund value, still seems an inordinate amount to pay for a fund that is fully invested in Australian shares and on which I decide, in conjunction with the adviser, where those funds will be invested. 

Can you please suggest an alternative, and cheaper way, to operate my account while still maintaining its income-generating purpose?

I am 76, and have metastatic prostate cancer. My oncologist thinks my life expectancy could be between five and seven years, however, I am out to prove him wrong. Long-term investment is consequently not my aim or intention.

A. My first question is do you need to be in super? Unless you have substantial other assets, the funds could be held in your own name outside super with no ongoing fees. Furthermore, there would be no worries about the death tax of 17 per cent, which applies to the taxable component of superannuation left to a non-dependant.

Alternatively, you could simply roll the money to another fund and let them do all the work for you.

In view of your comments about life expectancy, the rate of return on your fund may not be as important as having a strategy with which you feel comfortable, and which your family could handle if you became incapacitated.

* Not his real name

Do you have a question you’d like Noel to tackle? Email us at newsletters@yourlifechoices.com.au

Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance. His advice is general in nature, and readers should seek their own professional advice before making any financial decisions.

To make the most of your money in retirement, first you need to know the rules. The PensionChecker™ tool has all the information you need.



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    30th Jan 2019
    Which shoddy industry fund is he in ?
    Better to take it out and manage his own SMSF or put it into a good retail fund
    30th Jan 2019
    If you actually read the article, it is highly likely that this is a SMSF which he has set up purely to benefit from Franking Credits. More correctly, his adviser has set up. No industry or retail fund lets you choose exactly which shares to invest in, or returns your Franking credits directly. He isn’t the first person fleeced by advisors into setting up SMSF which they don’t manage themselves. He would have been better off with just a share portfolio, not super
    30th Jan 2019
    Stateplus charges an admin/management fee of about .7% and an (optional) advice fee of about .83%, both of which are way too high, so I've just opted out of the advice fee.
    'However, these fees combined would have chewed up about $100K out of my fund over the first ten years of my retirement, which amounts to about 3-4 years of extra retirement funding.
    These fees are exhorbitant and amount to daylight robbery, yet the government lets these super funds get away with it. They just let the big end of town gouge members in these super funds.
    My funds are not there for this type of exhortion...
    What do you say Mr Whittaker . I notice you didn't address this issue in you comment re Mike above.
    31st Jan 2019
    Would Yourlifeschoices kindly refer my question to Mr Whittaker or someone who might have to answer to these high fees charged by Super funds...
    And better still, can anyone suggest a super fund with decent returns and reasonable fees.
    thank you...
    31st Jan 2019
    I'm with state plus to I also opted out of advice fee because they were making more monthly money than I was and state plus has not had good returns
    2nd Feb 2019
    to Lifechoices...I'am still waiting for your response to the issues I raised in my tweet, and I guesss Mike is too.
    3rd Feb 2019
    I'am still waiting Yourlifechoices.....
    3rd Feb 2019
    Maris...thanks for your support...Something must be done about these rorting super funds, but no one can tell us which funds are not rorters......
    Karl Marx
    30th Jan 2019
    A SMSF based on franking credits, time for him to rethink his investment.
    I'd suggest in the intremin an income fund by an industry fund as they have been outperforming retail funds for decades.
    Don't go anywhere near a retail fund as they underperform & overcharge.
    30th Jan 2019
    What would you know about super 1984 your a left wing scumbag on a pension
    30th Jan 2019
    Spot on Robbo
    Karl Marx
    31st Jan 2019
    A lot more than you 2 idiots, shows your very low IQ, even combined it's not in double figures.
    So instead of attacking people with stupid & ridiculous comments how about posting something constructive & on topic.