Fee disclosure changes
In short, under RG97, we now include ‘indirect costs’ as part of your fees in annual statements. This is not an additional fee but instead shows some of the costs we pay to investment managers prior to setting the unit prices.
By law, there are certain elements and definitions of fees that we must disclose to you both for transparency and for enabling you to compare financial products. These fee disclosures may be managed through websites, PDSs, annual statements and other means.
What is RG97?
Regulatory Guideline 97 (known as RG97) is a set of Australian Securities and Investments Commission (ASIC) instructions all financial bodies must follow. RG97 was introduced on 1 October 2017 with the aim of increasing transparency and consistency in fee disclosures across the industry.
RG97 and all subsequent changes to RG97) did not change what fees apply to your super nor how those fees are charged. It simply changed how super funds and other investments show members about existing fees and charges.
AvSuper fees & charges
AvSuper does not directly charge you a fee for managing your investments. However, expenses related to managing our investments are deducted form the total pool of invested member savings – this happens before we set unit prices and before earnings are allocated to your account. Our fees table show this as a percentage of your account balance.
Our investment expenses include fees paid to investment managers and advisers, investment managers’ transaction fees, asset consulting fees, bank fees, management fees for trusts and some funds, custodian fees, our internal investment management costs and, at times, amounts required to maintain our operational risk reserves.
Prior to October 2017, we told you about these investment expenses through an Indirect Cost Ratio (ICR) which was calculated annually. From October 2017, our fees table included details of an investment fee which was also calculated annually based on the previous year’s costs. This simply replaced the ICR previously declared and is not an additional fee or cost to you.
From October 2017, we also added more detail to the ‘Additional explanation of fees and costs’ area of our fee disclosures to give you more detail on costs incurred by and our investment managers.
It is not particularly easy to compare super funds. RG97 is a step towards making it easier for you – it is certainly helpful to have the same terms in the same layout when looking at fees tables. However, it is worth remembering that different types of investment have broadly different fees and costs so it is worth noting such differences so you can ‘compare apples with apples’.
Of course, fees is not the only difference between super funds and accounts so you may also want to ask yourself questions such as will the fund help me when I have concerns, does the fund offer financial advice, do they offer a range of investment options (and some that may suit me), can I stay with this fund when I retire and what sort of returns have they achieved.
Email: firstname.lastname@example.org | Local call: 1300 128 751 | www.avsuper.com.au