H
i @Broker67,
Looking at your super funds fee structure they charge a 0.4% Administration Fee and a 0.45% Investment fee (.4 +.45 = 0.85%). On face value it looks cheap and it is when your super balance is in the several hundreds of thousands $$$. If you had a big chunk of it invested in A2 which has since gone onto becoming a multibagger for some its quite likely you have or might at some stage have a extra zero added onto you super balance.
The crossover point in fees between a industry super and SMSF is around 400K to 450K in your super fund balance. Once your super balance is in excess of that figure you are actually paying more. The bigger your balance the bigger your fees will be in comparison to the fixed fee structure of a SMSF which is around the $3500 - $4000PA mark regardless of the balance of your super.
Fees on industry super funds with combined fees of .85% of sums invested with them.
200K x 0.85% = $1700 PA
400K x 0.85% = $3400 PA
800K x 0.85% = $6800 PA
1.6M x 0.85% = $13600 PA
3.2M x 0.85% = $27200 PA
6.4M x 0.85% = $54400 PA
If you add the disparity in the fee structure between the two once you well and truly go over the breakeven point the difference over a few years let alone decades is considerable. You can well see why so many fund managers can afford to pay themselves the fees they think they are entitled too. You get people like Sam whats his face from we get our calls wrong more than we get it right company milking you for exorbitant amounts living the high life while returning mediocre returns to the people that have trusted their life savings with them.
SMSF are not for everyone as they entail you being 100% accountable for all the investing decisions, you need to do your research and get professional advice to see whether it suits your financial needs and you are up to the task. I believe that there are a some people here that are savvy enough to far exceed the returns over the long term if they have a proven track record of above average returns in their personal share accounts. If you can handle the risk, time, stress of managing your super as well as your personal finances and still have time to run and enjoy a family its something worth considering.
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