Fees and charges are an important factor when saving for your retirement.
One of the main reasons for setting up an SMSF is the transparency of the fees and charges.
Before buying anything, most of us look at the price. Your first question is usually: “How much is it going to cost me and what do I get for it?” And, most of the time you want some kind of assurance that what you’re about to pay for isn’t available somewhere else for less. There’s nothing worse than finding out you’ve overpaid for something unnecessarily. So many people don’t behave in this way when investing in their superannuation.
When it comes to Superannuation, rational thinking goes out of the window. People throw their Superannuation savings over to the first default Superannuation Fund that catches their eye. They don’t have a clue what they’re investing in or whether they’re overpaying for the service they receive or not.
If a Fund tells you “It costs you a dollar a week to be invested in Super”, they’re being economical with the truth. There’s a hidden layer of SMSF fees. Look at the returns you achieved and compare these returns with what you expected to receive. You can then determine the true cost of your investment.
If the share market returned 20% and it cost 5% in fees, you would have returned 15% and thought it was OK. But, if the markets returned only 2% for the year, and costs remained at 5% a year, you’ve suddenly gone backwards by 3%. People should look at their superannuation and ask questions.
Having control over your investments is reason alone for setting up your own SMSF. The cost savings you can achieve may make it even more worthwhile – the less you have to pay for administration, the more you retain in your Fund. The costs of maintaining your SMSF investments are as important as the investment returns generated. An expensive investment vehicle is like a bucket with a hole in it. There’s no point in adding a lot of water if it’s just going to leak out.
At Superannuation Warehouse the philosophy is simple: if we provide you with a professional service and offer the most efficient fee structure possible to assist you in growing your Superannuation balance, we know you’ll remain with us as a client.
