Fee size has big savings impact.


Byline: Paul Clitheroe

AN ANNUAL investment fee of 1.5 per cent sounds small but it can carry a big punch.

Over the past 30 years, for instance, Aussie shares have delivered returns averaging 9.2 per cent annually. If you'd invested $100,000 at the start of that period in a managed fund (like your super) with an annual fee of 1.5 per cent, you'd now have $896,508.

It sounds impressive, right? However, if you had invested that same $100,000 in a fund with annual fees of just 0.5 per cent, your investment would be worth $1,207, 807. That's an extra $311,000 going straight into your pocket just because of lower fees.

It goes to show that it makes better sense to forget about out-performance and concentrate on what you can control - paying the lowest total percentage fee possible.

There are three easy ways to do this.

Fold multiple super accounts into a single account

Most super funds charge a fixed annual administration fee, so having more than one fund means doubling up on this fee. Consolidate your accounts and get all...

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