Ever wondered if there’s a low fee or low cost super fund?
The reality is that all super funds need to charge fees to keep the fund running, but the good news is that Professional Super is a super fund that is designed for young people and aims to keep fees as low as possible. Low fees prevent your balance from being eroded by fees.
Not every super fund is equal - including in how they charge fees. So make sure you understand what you’re paying for and choose a fund that feels right for you.
It’s important to understand the total fees you pay. This covers all the different components from administration fees, to fees for certain transactions or features.
Here’s a breakdown of some of the fees you might be charged by your super fund.
1. Administration fees
These pay for the general administration of your account and covers the daily management of your super account. Most super funds will charge an administration fee. These fees could be a flat dollar fee, a percentage of your account balance or both.
At Professional Super, we discount most fees for members with balances under $1,000.
See our Fees & discounts page or PDS for details.
2. Investment fees
Your superannuation money is professionally invested. Investment fees cover the costs incurred from managing the investment of your money, for example, asset management fees.
3. Transaction costs
Similar to investment fees, transaction costs relate to your money being invested. Transaction costs are incurred when assets are bought or sold. They are shown net of amounts received by the buy-sell spread charged.
4. Switching fees
Switching fees are charged when you change your super account's investment strategy.
At Professional Super, you can choose from three investment options; Balanced, Growth and High Growth. If you decide to switch options you won’t pay any switching fees, but may incur a buy/sell spread. Buy/sell spreads represent the estimated transaction costs incurred when buying or selling assets.
5. Insurance fees
Insurance premiums pay for insurance cover you have within your super account. This cover may be something you have opted into, or it could be automatically provided by your super fund - depending on your age, balance and whether your super account is active.
As Professional Super is designed for young people, there is no TPD (disability cover) or life insurance. Since there’s no insurance provided, you pay $0 in insurance fees to help keep your fees low.
While fees are important, so are your investment returns. Fees are not clearly correlated with value for money1 and any assessment should be made using a broad range of criteria, including investment performance. Small differences in both investment performance and fees and costs can have a substantial impact on your long term returns.
