D.I.Y. or R.I.P.O.F.F?

Hi Scott,

What is a reasonable ongoing management fee for invested funds? My wife and I have just over $1 million invested in our self managed superannuation fund. We paid $13,200 in management fees over the past 12 months, which works out at 1.21 percent. If published, please do not use my real name.

Wendy

Hi ‘Wendy’

First up, I always change people’s names.

Second, I’d argue that you don’t actually have a ‘self managed super fund’ ... you have a ‘financial planner managed fund’. There’s nothing ‘DIY’ about handing over $13,200 in fees a year.

For comparison, the super fund that I recommend to my friends and family charges 0.03 percent a year (with a mixture of ASX 300 shares, international shares and fixed interest). It also provides the opportunity to buy individual shares within the super fund (for an extra $280 a year plus $20 a trade).

In your case that would bring down your fees from $13,200 to about $400 a year. If you don’t have property in your fund (which I don’t recommend unless you’re a small businessperson), I reckon that’s a no-risk, guaranteed way to boost your super by at least $100k over the next 10 years.

Scott