Claw back your super fees

SUPERANNUATION and managed funds returned record losses in the last financial year and, to add insult to injury, advisers and managers still deduct hidden fees.

SUPERANNUATION and managed funds returned record losses in the last financial year and, to add insult to injury, financial advisers and/or fund managers still deduct hidden fees.

These so-called trail commissions average between 0.5 and one per cent of your fund's value.

Annual fee income generated by the investment industry is worth an estimated $1 billion, but there is a way to put that money back in your pocket.

Discount brokers such as YourShare take over as your broker, collect any fees and upfront commissions being paid and send most of the money back to you.

Brisbane pharmacist Gary Herman read about the service in Money magazine where it was named best rebate service for 2009.

Mr Herman thought the "something for nothing" offer was just too good to be true, but the arrival of a $1057 cheque from trail fees on his superannuation and managed funds quashed his fears.

"It was legitimate, above board and it didn't cost me a thing," he said. "There's no nasties in there, but I was expecting one."

Nicholas Andree received a refund of $450 last year and was surprised at how the trail fees added up on his managed funds.

"I guess I just wrote the money off," the 48-year-old Brisbane public servant said. "I had no choice. In good times and bad, the commission still came out. They still got the cream, but now I do."

Paul Brady, founder of yourshare. com.au said: "As soon as you nominate us as your broker, nothing else changes except you stop paying entry fees and trailing commissions and we collect them for you and send you cash back."

The catch? YourShare keeps 50 per cent of what they claw back in trailing fees, but you get the other 50 per cent and all of the entry fees.

Some discount brokers charge an upfront fee to perform the same service and then return all the fees to you.

Mr Brady said people were surprised when they found out just how much commission they paid.

"If you have $100,000 in super, the trailing fee is typically 0.5 per cent or $500," he said.

"We get that back and send you a cheque for a minimum of $250, plus you get 100 per cent upfront entry fees back so, if you make contributions of $1000 a month, the fee is $50, we'll get 100 per cent of that back for you and send you a cheque for $600 every 12 months.

"The average self-funded retiree gets back $842 a year. It's a really nice feeling sending all that money back."

Trail and entry fees also apply to finance products such as life insurance, income protection insurance, margin loans and even pensions.