Here are the master trusts and industry funds that advisers will probably never tell you about, unless they work on a fee-for-service basis.
According to Rice Kachor Research, these options have the lowest fees and charges. A key reason is that they work on a zero or very low commission structure, leaving financial planners with little incentive to flog them.
Industry funds are well known for not forking out on commissions. And, two of the cheapest master trusts options in our tables are from the Commonwealth Bank, which uses a salaried field force to sell them to corporate clients.
Using its Employers Superannuation Comparator software, Rice Kachor Research analysed a database of 55 different master trusts and 16 public offer industry funds to find the five lowest cost master trusts and industry funds.
In each case, Rice Kachor examined the managed option, using the same expected future investment returns and the example of a fund with five employees and a total contribution of $30,000 a year.
Executive director Mark Kachor says the comparison takes into account initial and ongoing fees to show what the fund value would be worth in five years time.
Industry funds came out shining with the five cheapest funds all offering better value than the five lowest cost master trusts. Of course, industry funds also offer a far narrower range of investment options.
The industry funds were analysed separately because many are not unitised. This means that they may not always declare the true level of charges, especially those of their asset managers, making it almost impossible to provide a like-for-like comparison, says Kachor.
Kachor believes there are many low cost master trusts that offer excellent value to small to medium corporate funds, when compared to what the funds would be able to provide themselves.
