It's Your Money 🧑💼
Superannuation isn't a free service. Your super fund charges fees to manage your account and invest your money. While fees are a necessary part of the system, understanding them is the first step towards ensuring you're not paying more than you should. This guide provides general information about common fees and is not personal financial advice.
The Two Big Ones: Admin & Investment Fees
Most of the fees you pay will fall into two main categories:
1. Administration Fees: These are the costs of running your account. Think of it like a bank account fee. It covers things like sending you statements, maintaining your records, and providing member support. They are often charged in two parts:
- A fixed fee: A flat amount, such as $78 per year ($1.50 per week).
- A percentage fee: A percentage of your account balance, such as 0.20% per year.
2. Investment Fees: This is the cost of managing the money in your account. Your super fund hires investment professionals to buy and sell assets (like shares and property) on your behalf. This fee covers their expertise and the costs of transactions. It is almost always charged as a percentage of your balance.
Key takeaway: Admin fees are for keeping your account open, while investment fees are for growing your money.
Other Fees to Know About
You might also come across these other charges:
- Advice Fees: If you seek personal financial advice from your fund, there will be a specific fee for that service. This is an opt-in cost.
- Insurance Premiums: While not technically a "fee," the cost of your insurance (Life, TPD, Income Protection) is deducted directly from your super account.
- Switching Fees: Some funds may charge a small fee if you move your investment between different options (e.g., from a Balanced to a High Growth option).
- Exit Fees: These used to be common but have now been banned on all super products. You should not be charged a fee for closing your account and moving to another fund.