Find every layer of cost
Super costs can include fixed and percentage administration fees, investment fees and costs, transaction costs, performance fees, advice fees and insurance premiums. Some appear as direct deductions while others are reflected in unit prices or net returns. Use the statement and product disclosure information together.
Keep insurance premiums separate in your analysis. They reduce the balance but purchase protection, so they should be judged against the cover provided rather than described as an investment fee.
Translate percentages into your dollars
Apply fixed and percentage charges to your current balance and expected contributions. A fixed fee consumes a larger share of a small account; a percentage fee grows with the balance. If comparing funds, use the same balance and investment type for each estimate.
Low cost is valuable because every fee dollar also loses future compounding, but cheapest is not automatically best. Consider net long-term performance, risk, insurance and service. A higher-cost option needs a clear benefit that is relevant to you.
Reduce waste without creating a new problem
Duplicate accounts are a common source of repeated fixed fees and premiums. Consolidate only after checking cover, defined benefits and employer arrangements. Within a fund, compare the cost of your current investment option with alternatives that take similar risk.
Review fees annually rather than switching whenever a new ranking appears. Record the total dollar cost and net return, ask the fund about unexplained deductions and confirm any adviser fee is linked to a service you agreed to receive.
Quick reference
Key things to remember
- Look for administration, investment and transaction costs.
- Include advice fees and insurance premiums separately.
- Fixed fees weigh more heavily on smaller balances.
- Performance figures and fee disclosures may use different conventions.
Put it into practice
Your next steps
- 01
Use your annual statement to total actual dollars deducted.
- 02
Run the fund’s fee example at your balance.
- 03
Compare similar investment strategies.
- 04
Ask whether optional services can be removed.
Check the source
Official information
Super and tax rules change. These primary sources are the right place to verify the details before you act.