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Why do some managed funds charge so much in fees?

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  • Why do some managed funds charge so much in fees?

    A friend was looking at OnePath, recommended by ANZ, and then compared it to Colonial First State, recommended by Commonwealth Bank, and he said the yearly fee with Colonial First State is about $600 cheaper. Plus he said Colonial First State has no entry or exit fees while OnePath charges a one off fee for setting up the fund. Does OnePath perform better? Is there an online article or forum he should check out?

    Thanks.

  • #2
    Its a mine field out there at the moment Pamount, watch the nightly news.

    FWIW anyone with funds to invest would do well to keep their powder dry until the Banking Royal Commission has run its course.

    Beware of online forum advice, the pump and dumpers love em.

    Comment


    • #3
      Agree withe Yelta. At a minimum, until the banking Royal Commission has finished rocking that sector of the world, advice from there may be questionable. The nightly news of late has had some really appalling revelations from the Royal Commission thus far.

      If your friend has not sought independent financial advice, perhaps it's time? Or perhaps consider an industry fund?

      Comment


      • #4
        An answer to the thread's title question "Why do some managed funds charge so much in fees?": Because they can.


        Java "$*#&% low life bottom feeding money grubbers!" phile
        Last edited by Javaphile; 26 May 2018, 04:44 PM.
        Toys! I must have new toys!!!

        Comment


        • #5
          Lack of education.

          One thing people need to be aware of risk v reward. That always depicts a fair amount. There will always be exceptions to the rule.

          I explain it like this. Government super funds only need to worry about low risk. Because they take lower risk and they end up paying lower amounts as investing in property funds isn’t all that difficult.

          Some private funds take much higher risk and seek much higher returns and the reward for their workers who do so is a much higher salary.

          So fees need to be one point in consideration.

          If you had $100 and these options were available which would you take.

          At the end of the year I make $20 for you but keep $10 so you only make $10.

          At the end of the year I make $7 for you and only keep $1 so you only get $6

          Are fees really relevant then? You’d be surprised across my experience that most can’t stomach paying extra fees and take option 2.

          Comment


          • #6
            Pamount I believe the question your asking is about "Wrap Accounts'.
            Basically - (and Im no financial adviser and I detest when the so called Professionals refer to
            Mum & Dad investors) an all in one filing system to hold certain types of investment vehicles.
            Such as Shares managed funds, even SMSuper etc.etc.

            I agree with posts above.. we all can beholden to the low fees mantra.

            These wrap accounts have been around since at least the late 90's - and yes Storm Financial were using
            the likes of Colonial, BT, BoQ and others for a long time before they were caught.

            The main difference between the different brands other than fee structures are which Investment Brands they
            do OR don't allow you access too. No different to most every form of business / market....
            In other words who's up who and who's not paying the rent" !

            PS some of the worst investment outcomes I've had was from so called professional advisers.

            Comment


            • #7
              I am putting the other side to the BRC. How many transactions a day are carried out by all the banks in Oz? Is it a 1000 or 10,000, who knows, it will be a very large number, tally them up for period (from 2014 I think ) the BRC is looking at? So far up to 100 individual issues and a much larger number of systemic issues, really just stuff ups like human beings do every day of the week. One conclusion could be that banks shouldn't employ humans. I doubt if that would work. I fear the BRC is engaging in McCarthyism, that we are seeing a distorted view of the banking industry. The banks for their part just seem to be playing along certain in the view that they will never get a fair and impartial hearing. Seems strange for me to be defending the indefensible, but that impression is coming across the more the BRC continues.

              Comment


              • #8
                Originally posted by WarrenK View Post
                I am putting the other side to the BRC. How many transactions a day are carried out by all the banks in Oz? Is it a 1000 or 10,000, who knows, it will be a very large number, tally them up for period (from 2014 I think ) the BRC is looking at? So far up to 100 individual issues and a much larger number of systemic issues, really just stuff ups like human beings do every day of the week. One conclusion could be that banks shouldn't employ humans. I doubt if that would work. I fear the BRC is engaging in McCarthyism, that we are seeing a distorted view of the banking industry. The banks for their part just seem to be playing along certain in the view that they will never get a fair and impartial hearing. Seems strange for me to be defending the indefensible, but that impression is coming across the more the BRC continues.
                You're kidding....right? Or a banker. ;-)

                "just stuff ups", " McCarthyism".... seriously???

                What we are seeing are the distortions that the banks and others have deliberately perpetrated and only an institution that believes it has done no wrong
                would consider being found out not fair and not impartial.
                Last edited by chokkidog; 26 May 2018, 06:27 PM.

                Comment


                • #9
                  Originally posted by EspressoAdventurer View Post
                  refer to
                  Mum & Dad investors)

                  Ha! Yes! That old chestnut! Beloved of everyone with a vested interest in hiding the truth...... including some ummm... politicians of the cigar smoking type ;-)

                  The myth of 'mum and dad' property investors - ABC News (Australian Broadcasting Corporation)

                  https://www.smh.com.au/opinion/when-...20-gzoviy.html

                  Comment


                  • #10
                    Happy with my cbus thanks

                    Comment


                    • #11
                      There are certainly 'mum and dad' investors who bought a house before, say, 1985 and found that after the property boom starting from the mid-1990s, they were sitting on a great deal of equity . Soon enough, there was a increasing number of 'advisors' setting up seminars which explained how to leverage that equity to buy one or more investment properties and use negative gearing to help pay for these properties even if earning an average or even low income. These properties would later to be sold and the capital gain used to help fund retirement. Given the increasing number of baby boomers reaching retirement age, it could be for the better that these retirees are self-funded and not a burden on our social security bill.

                      Comment


                      • #12
                        Originally posted by chokkidog View Post
                        You're kidding....right? Or a banker. ;-)
                        OR the other possibility Choki is...that you could have been entirely mislead !

                        Warren in fact could BE Both*....

                        Sorry WK of course your entitled to your opinion and to post it. And I support that entirely.
                        I just find it 'head shackingly - mind boggling' how you have come to that PoV.

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                        • #13
                          Originally posted by Jackster View Post
                          Happy with my cbus thanks
                          Have a look at page 78 Sunday Mail today article by Scott Pape "Your surprise $3850 bill". I agree with everything Scott is saying. It is worth reading!

                          Comment


                          • #14
                            Originally posted by WarrenK View Post
                            Have a look at page 78 Sunday Mail today article by Scott Pape "Your surprise $3850 bill". I agree with everything Scott is saying. It is worth reading!
                            I suspect this is the same article in the Herald Sun Warren.
                            Category: | Herald SunAcross the country, every adult is also sent a similar bill, with the amount varying depending on the size of their super balance. Some people, often the poorest workers, get three or four bills because they have their super in three or four funds.
                            That’s effectively what’s happening in Australia, only it’s hidden because your super fund doesn’t invoice you.



                            These "hidden charges" will be revealed in full on the annual statement for those diligent enough to peruse it carefully, nothing is hidden.

                            Comment


                            • #15
                              I think an element that people should take responsibility and ask questions themselves rather than just expecting someone to look after it all.

                              Ignorance is bliss

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