Stockspot releases its annual Fat Cat Funds Report

Report reveals the super funds that charge high fees and deliver low returns.

Stockspot releases its annual Fat Cat Funds Report

Stockspot’s most recent annual Fat Cat Funds Report reveals the super funds that charge high fees and deliver low returns and, unsurprisingly, bank funds are the biggest culprits.

The report showed that ANZ, AMP and CBA were the worst offenders.

However, the banks have hit back, saying the report is “substantially overstated”.

Regardless, figures found in the research revealed how some Australians stand to lose up to $100,000 from every $400,000 they put into super, simply due to high fees and poor returns.

The Stockspot study examined 4100 super funds worth around $709 billion. Of these 4100 funds, 521 were deemed to be fat cats, worth around $45.59 billion. Around $600,242,623 in fees are paid to fat cat funds each year. The average fee charged by fat cat funds is 1.99 per cent.

Funds that underperform other funds by more than 10 per cent are deemed fat cats. Two thirds of all fat cat funds are managed by the Big Four banks.

And bank-owned funds weren’t the only ones who fell into the fat cat category: two per cent of all industry super funds are fat cats, compared with 13 per cent of all retail funds.

The Fit Cat Awards were also announced, with Folkestone Maxim Asset Management taking out the top spot, followed by Forager Funds Management, Firstmac, Supervised Investments Australia Ltd and Equity Trustees.

Find out if your super fund is a fat cat or a fit cat at www.stockspot.com.au

Do you know how much in fees you pay each year? Are you surprised that bank-owned funds are the worst offenders? Is your super fund a fat cat?

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    COMMENTS

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    TREBOR
    9th Oct 2017
    11:33am
    Well - they all are, regardless of where and how they are situated. Unfortunately this 'private enterprise' model means that there are overheads for boards and such, and that includes their perks such as travel and such. Good work if you can get it.

    I long ago calculated that my then private super fund would eat something like 70% of the input before I got it back, so I canceled it. Later went onto industry super fund for work, and the returns were miniscule and the costs high.

    In my reclining years, on part time occasional, the funds essentially ate the super without a burp... my favourite story is that after thirteen years in a job that - at those rates and not today's - was returning me the same income as a back-bencher - I had all of $7,000 in super. Pauline Hanson pulled the pin on parliament after thirteen months and got a handout of $70,000.

    These are some of the reasons I've long advocated a single national super fund for all under the same rules and rates of return, and that accounts under a certain level should pay no fees. No rorting, no special treatment, no ripping off the lowest paid any more.
    Tom Tank
    9th Oct 2017
    11:46am
    Sounds good to me BUT the pollies won't go for it because there donors would no longer contribute.
    We are in a position now where corruption at the highest level is more likely than not. Sad to say that but blind Freddie would probably agree.
    Rosret
    9th Oct 2017
    1:22pm
    I so agree Trebor. It is incredibly unfair the way it is now.
    Rosret
    9th Oct 2017
    1:20pm
    Fees paid to super funds $600B p.a. Imagine if the government had kept their superannuation schemes - we wouldn't have a debt issue!
    Why did they ever think Private was better? It doesn't seem to have worked for any scheme - medical, gas, electricity, railways, etc etc etc.
    TREBOR
    9th Oct 2017
    2:52pm
    Yes - an incredible amount of money in fees...a one-stop shop would cost a hell of a lot less to run, but I suppose to some that smacks of their concept of 'socialism' (meaning some form of communism) or it cuts them personally out of a second or third income strand for life. Many politicians sit on the 'board' of industry funds - another sweet ride.

    Me? Cynical? Nev-AH!!
    Sundays
    9th Oct 2017
    1:24pm
    Good to have it confirmed that I am in a fit-cat fund. I knew this anyway, because I had conducted my own research. Unfortunately, since choice was introduced this is what you have to do yourself and can't just rely on your employers default fund
    Charlie
    9th Oct 2017
    1:38pm
    It certainly looked that way when I saw the printout and the number and frequency of handling fees, but like many people I was at a loss to know what to do about it. Now it doesn't matter, because it is all just a memory.
    retroy
    9th Oct 2017
    1:51pm
    I was in the sunsuper scheme which was very good for many years until they decided to put up their admin charge by 1100% yes 1100%.
    I asked them why this should be, and what was the justification. They just said it was still cheaper than some others, so I pulled out and set up a SMSF with less than half the cost before their increase. Subsequently I saw that they had a corporate box at Lang park and were sponsoring a football team as well as many other sponsorships.
    So you can easily deduce the cost of admin had not gone up, but their ego trip cost had.

    9th Oct 2017
    3:14pm
    All banks are total bastards. The sooner we have a Royal Commission into our banking sector, the sooner we can stop their rapacity.

    9th Oct 2017
    5:12pm
    If you dont exercise your free will and your brains - you have no one else to blame .
    If super had all been in the hands of government , chances are the net returns would have been low
    Irs always someone else’s fault with the lefties - no personal responsibility
    TREBOR
    10th Oct 2017
    9:55am
    Nothing to do with 'lefties' since many 'righties' are in the same boat. A properly run single fund - OUT of the hands of politicians as I've stated times many, and with a board consisting of at least 20% pensioners and 20% SFRs along with people elected via a proven track record, would surely compete well on the market.

    We already have the skeleton of such a fund in place with the Pension Guarantee based on income tax derived from the entire body of taxpayers over a working lifetime - sounds simple enough to me to simply extend that and take on board all super contributions, and by installing it under one roof, cut out the shameful multiplication of costs and 'management' overheads that are so reminiscent of the power supply debacle, private roads, and so forth.

    Other advantages I can see is market power via having a much larger fund available in one place .... for..... wait for it ...... genuine investment in this nation and its future. Such a prospect, no doubt, strikes terror into the hearts of politicians bent on having as much control over the populace as possible, since such a body, cashed-up and ready to fight, would offer the same kind of power in politics as 'business' currently enjoys with its access to billions. No brown paper bags or sly offers of a 'consultant' position post-politics any more... very sad for the future plans of many politicians.

    We could Snowy Scheme the joint to death and reap returns for generations through a reasonable and fair application of rates for power etc.... take back the nation from the global lunatics and sociopaths, so to speak.
    floss
    9th Oct 2017
    6:20pm
    We tried AMP and the Big Banks and being new to the game we were ripped off, since then we went with a Industry Fund and found the fees still high but a lot less than the rest now we only get ripped off by local trade people.
    ex PS
    11th Oct 2017
    8:28am
    I would like to get the fee structure in perspective, if you are earning 7% in a tax friendly environment, and the average bank yield is 3.0%, what is a high fee structure. Is it 1%, 2% or what, I think this has to be put in perspective.
    I am currently paying slightly over $1,200.00 a year to have a one of my $250,000 policies managed, I just set the investment parameters at the beginning of the financial year and need do nothing unless I choose to change something. It returned an average of around 12%, if I was running a Self Funded Super Scheme, I believe I would be up for about $1,000.00 in compulsory auditing fees (That was the case in 20011 when I investigated this type of fund) and I would have to keep track of all of my investments myself.
    To me, for the returns I am getting, the fees are worth it.
    Super Funds are like anything else, there are good and bad, you have a choice, it is ultimately in your hands.
    Mez
    13th Oct 2017
    10:27pm
    The idea is NOT to have financial advisors and do your own online with your super account otherwise heaps of money down the drain in 1 to 2% commission for them!
    When you have a lot in your fund then 1percent is a lot of money!
    Go for industry funds and join all into one super fund as well.
    I do better online in managing the asset classes than the fund's choice and for that reason I will not divulge its name.
    I am not in finance but one can soon become financially savvy in a relatively short time if one has the incentive.
    Good luck!


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