Commonwealth Consolidated Regulations

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CORPORATIONS REGULATIONS 2001 - SCHEDULE 10

Disclosure of fees and other costs

(regulations 7.9.16K, 7.9.16M and 7.9.16N)

Part 1 -- Interpretation

101   Definitions

                   In this Schedule:

activity fee , for a superannuation product, has the meaning given by subsection 29V(7) of the SIS Act.

administration fee , for a superannuation product, has the meaning given by subsection 29V(2) of the SIS Act.

advice fee :

                     (a)  for a superannuation product--has the meaning given by subsection 29V(8) of the SIS Act; and

                     (b)  for a managed investment product--means an amount that is:

                              (i)  paid or payable to a financial adviser for financial product advice to a retail client or product holder about an investment; and

                             (ii)  not included in a contribution fee, withdrawal fee, exit fee, establishment fee or management cost.

balanced investment option means an investment option in which the ratio of investment in growth assets, such as shares or property, to investment in defensive assets, such as cash or bonds, is as close as practicable to 70:30.

brokerage means an amount paid or payable to a broker for undertaking a transaction for the acquisition or disposal of a financial product.

buy-sell spread :

                     (a)  for a superannuation product--has the meaning given by subsection 29V(4) of the SIS Act; or

                     (b)  for a managed investment product--means an amount, deducted from the value of a financial product of a product holder, that represents an apportionment, among product holders, of the actual or estimated transaction costs incurred by the managed investment scheme.

contribution fee means an amount paid or payable against the initial, and any subsequent, contributions made into a product by or for a retail client for the product.

Note:          A contribution may be made by an employer on behalf of the product holder or retail client.

distribution costs means the costs or amounts paid or payable for the marketing, offer or sale of a product.

Note:          This includes any related adviser remuneration component other than an advice fee.

establishment fee means an amount paid or payable for the establishment of a client's interest in a product.

Note:          This does not include contribution fees paid or payable against the initial contribution into the product.

exit fee :

                     (a)  for a superannuation product--has the meaning given by subsection 29V(6) of the SIS Act; and

                     (b)  for a managed investment product--means an amount paid or payable on the disposal of all interests held in the product.

incidental fees means costs or amounts, other than costs or fees defined in this clause, that are:

                     (a)  paid or payable in relation to the product; and

                     (b)  not material to a retail client's decision to acquire, hold or dispose of his or her interest in the product.

Example:    Cheque dishonour fees.

indirect cost of a MySuper product or an investment option offered by a superannuation entity means any amount that:

                     (a)  a trustee of the entity knows, or reasonably ought to know, will directly or indirectly reduce the return on the investment of a member of the entity in the MySuper product or investment option; and

                     (b)  is not charged to the member as a fee.

insurance fee , for a superannuation product, has the meaning given by subsection 29V(9) of the SIS Act.

investment fee , for a superannuation product, has the meaning given by subsection 29V(3) of the SIS Act.

lifecycle MySuper product has the meaning given by regulation 7.9.07N.

lifecycle stage has the meaning given by regulation 7.9.07N.

performance , of a managed investment product, a superannuation product, a MySuper product or an investment option, includes:

                     (a)  income in relation to the assets of, or attributed to, the managed investment product, the superannuation product, the MySuper product or the investment option; and

                     (b)  capital appreciation (realised or unrealised) to the value of the managed investment product, the superannuation product, the MySuper product or the investment option.

performance fee means an amount paid or payable, calculated by reference to the performance of a managed investment product, a superannuation product, a MySuper product or an investment option.

service fees means advice fees, special request fees and switching fees.

special request fees includes fees paid or deducted from a product holder's managed investment product for a request made to the managed investment scheme.

Example:    This applies to a fee for a request for additional information from a managed investment scheme.

switching fee :

                     (a)  for a superannuation product--has the meaning given by subsection 29V(5) of the SIS Act; or

                     (b)  for a managed investment product--means an amount paid or payable when a product holder transfers all or part of the product holder's interest in the managed investment product from one investment option to another.

withdrawal fee means an amount, other than an exit fee, paid or payable in respect of:

                     (a)  a withdrawal; or

                     (b)  the disposal of an interest in a product.

102   Management costs

             (1)  Management costs , for a managed investment product, means any of the following:

                     (a)  an amount payable for administering the managed investment scheme;

                     (b)  for a custodial arrangement--the cost involved, or amount paid or payable, for gaining access to, or participating in, the arrangement;

                     (c)  distribution costs;

                     (d)  other expenses and reimbursements in relation to the managed investment scheme;

                     (e)  amounts paid or payable for investing in the assets of the managed investment scheme;

                      (f)  amounts deducted from a common fund by way of fees, costs, charges or expenses, including:

                              (i)  amounts retrieved by an external fund manager or a product issuer; and

                             (ii)  amounts deducted from returns before allocation to the fund;

                     (g)  estimated performance fees;

                     (h)  any other investment-related expenses and reimbursements, including any associated with custodial arrangements.

             (2)  The following fees and costs are not management costs for a managed investment product:

                     (a)  a contribution fee;

                     (b)  transactional and operational costs;

                     (c)  an additional service fee;

                     (d)  an establishment fee;

                     (e)  a switching fee;

                      (f)  an exit fee;

                     (g)  a withdrawal fee;

                     (h)  costs (related to a specific asset or activity to produce income) that an investor would incur if he or she invested directly in the asset;

                      (i)  incidental fees.

103   Transactional and operational costs

                   Transactional and operational costs include the following:

                     (a)  brokerage;

                     (b)  buy-sell spread;

                     (c)  settlement costs (including custody costs);

                     (d)  clearing costs;

                     (e)  stamp duty on an investment transaction.

104   Indirect cost ratio

             (1)  The indirect cost ratio ( ICR ), for a MySuper product or an investment option offered by a superannuation entity, is the ratio of the total of the indirect costs for the MySuper product or investment option, to the total average net assets of the superannuation entity attributed to the MySuper product or investment option.

Note:          A fee deducted directly from a member's account is not included in the indirect cost ratio.

          (1A)  The indirect cost ratio ( ICR ), for an investment option offered by a managed investment scheme, is the ratio of the management costs for the option that are not deducted directly from a product holder's account, to the total average net assets of the managed investment scheme that relates to the investment option.

Note:          A fee deducted directly from a product holder's account is not included in the indirect cost ratio.

             (2)  The ICR for a Product Disclosure Statement is to be determined for the financial year before the Product Disclosure Statement is issued.

             (3)  The ICR for a periodic statement is to be determined over the latest reporting period.

Part 2 -- Fees and Costs Template, example of annual fees and costs and Consumer Advisory Warning for Product Disclosure Statements

Division 1 -- The fees and costs template for superannuation products

201   Template for superannuation products

Fees and other costs

T his document shows fees and other costs that you may be charged. These fees and other costs may be deducted from your money, from the returns on your investment or from the assets of the superannuation entity as a whole.

 

Other fees, such as activity fees, advice fees for personal advice and insurance fees, may also be charged, but these will depend on the nature of the activity, advice or insurance chosen by you.

 

Taxes, insurance fees and other costs relating to insurance are set out in another part of this document.

 

You should read all the information about fees and other costs because it is important to understand their impact on your investment.

 

[If relevant] The fees and other costs for each MySuper product offered by the superannuation entity, and each investment option offered by the entity, are set out on page [insert page number] .

 

[Name of superannuation product]

Type of fee

Amount

How and when paid

Investment fee

 

 

Administration fee

 

 

Buy-sell spread

 

 

Switching fee

 

 

Exit fee

 

 

Advice fees

relating to all members investing in a particular MySuper product or investment option

 

 

Other fees and costs¹

 

 

Indirect cost ratio

 

 

1.             [If there are other fees and costs, such as activity fees, advice fees for personal advice or insurance fees, include a cross-reference to the "Additional Explanation of Fees and Costs".]

Division 2 -- The fees and costs template for managed investment products

202   Template for a multiple fee structure--managed investment products

Fees and other costs

T his document shows fees and other costs that you may be charged. These fees and costs may be deducted from your money, from the returns on your investment or from the assets of the managed investment scheme as a whole.

 

Taxes and insurance costs are set out in another part of this document.

 

You have 2 different fee payment options:

                     (a)  to pay contribution fees upfront, at the time when you make each investment into the managed investment scheme; or

                     (b)  to pay contribution fees later (for example, on the termination of your investment or by way of other increased fees).

Note:       You may pay more in total fees if you choose to pay contribution fees later.

 

You should read all the information about fees and costs because it is important to understand their impact on your investment.

 

[If relevant] Fees and costs for particular investment options are set out on page [insert page number] .

 

[Name of managed investment product]

Type of fee or cost

Amount

How and when paid

 

Option to pay contribution fees upfront

Option to pay contribution fees later

 

Fees when your money moves in or out of the managed investment product

 

 

 

Establishment fee

The fee to open your investment

 

 

 

Contribution fee¹

The fee on each amount contributed to your investment

 

 

 

Withdrawal fee¹

The fee on each amount you take out of your investment

 

 

 

Exit fee¹

The fee to close your investment

 

 

 

Management costs

 

 

 

The fees and costs for managing your investment¹

The amount you pay for specific investment options is shown at page [insert page number]

 

 

 

Service fees²

 

 

 

Switching fee

The fee for changing investment options

 

 

 

1.              This fee includes an amount payable to an adviser. (See Division 4, "Adviser remuneration" under the heading "Additional Explanation of Fees and Costs".)

2 .             [If there are other service fees, such as advice fees or special request fees, include a cross-reference to the "Additional Explanation of Fees and Costs".]

202A   Template for single fee structure--managed investment products

Fees and other costs

T his document shows fees and other costs that you may be charged. These fees and costs may be deducted from your money, from the returns on your investment or from the assets of the managed investment scheme as a whole.

 

Taxes and insurance costs are set out in another part of this document.

 

You should read all the information about fees and costs because it is important to understand their impact on your investment.

 

[If relevant] Fees and costs for particular investment options are set out on page [insert page number] .

 

[Name of managed investment product]

Type of fee or cost

Amount

How and when paid

Fees when your money moves in or out of the managed investment product

 

 

Establishment fee

The fee to open your investment

 

 

Contribution fee¹

The fee on each amount contributed to your investment

 

 

Withdrawal fee¹

The fee on each amount you take out of your investment

 

 

Exit fee¹

The fee to close your investment

 

 

Management costs

 

 

The fees and costs for managing your investment¹

The amount you pay for specific investment options is shown at page [insert page number]

 

 

Service fees²

 

 

Switching fee

The fee for changing investment options

 

 

1.              This fee includes an amount payable to an adviser. (See Division 4, "Adviser remuneration" under the heading "Additional Explanation of Fees and Costs".)

2 .             [If there are other service fees, such as advice fees or special request fees, include a cross-reference to the "Additional Explanation of Fees and Costs".]

Division 3 -- How to fill in the template

203   The preamble

                   The material in the preamble to the template should only include matters that are relevant to the product.

Example:    Insurance costs will generally not be relevant to a managed investment product.

204   Column 2--presentation of amounts

             (1)  This clause, clause 205 and clause 206 are subject to regulations 7.9.15A, 7.9.15B and 7.9.15C.

             (2)  If a particular fee or cost is not charged, 'nil', 'zero', '0' or 'not applicable' (if it would not be misleading) must be written in column 2 opposite the type of fee or cost.

             (3)  If it is not possible to determine a single amount or percentage of a fee or cost, it may be written as a range of fees or costs.

             (4)  If the exact amount of a fee or cost paid or payable is not known, an amount that is a reasonable estimate of the amount attributable to the retail client must be shown.

             (5)  An amount set out in accordance with subclause (4) must be clearly designated as an estimate.

             (6)  If an amount or cost has a number of components, the amount of each component must be listed separately.

Example:    Management costs: 1.8% of product holder's balance + $70 per year.

             (7)  A cost or amount paid or payable must include, if applicable:

                     (a)  GST less any reduced inputs tax credits; and

                     (b)  stamp duty.

205   Column 2--include information for each MySuper product or investment option

             (1)  The fee information must be set out:

                     (a)  for superannuation products--for each MySuper product and each investment option offered by the relevant superannuation entity; and

                     (b)  for managed investment products--for each investment option offered by the relevant managed investment scheme.

             (2)  It may be:

                     (a)  set out in the table; or

                     (b)  cross-referenced in the table to another section of the Product Disclosure Statement that contains the relevant fee information.

206   Presentation of multiple fee payment options

                   If a superannuation entity or managed investment scheme has more than 2 options for the payment of fees:

                     (a)  the number of fee payment options must be set out in the preamble; and

                     (b)  details of all fee payment options must be set out in the template.

207   Column 3--how and when fees and costs are payable

                   Column 3 of the template must set out:

                     (a)  how the fee is or will be recovered, for example by deduction from:

                              (i)  the member's investment balance; or

                             (ii)  the assets of the superannuation entity or managed investment scheme;

                            (iii)  contributions; or

                            (iv)  withdrawals; and

                     (b)  the recurrence of the recovery of the fee; and

                     (c)  the timing of the recovery of the fee.

208   Other material to be included in the template

             (1)  The template must clearly indicate which fees and costs are negotiable (for example, by stating in column 3 'The amount of this fee can be negotiated.').

             (2)  An indication that a fee or cost is negotiable must be cross-referenced to an explanation outside the template in the 'Additional Explanation of Fees and Costs' part of the fees section.

Division 4 -- Additional explanation of fees and costs

209   Matters to be included as additional explanation of fees and costs

                   The following information, if relevant to the particular superannuation product or managed investment product, must be included under the heading 'Additional Explanation of Fees and Costs':

                     (a)  the explanation of the fees mentioned in footnote 1 for superannuation products and footnote 2 for managed investment products;

                     (b)  information on performance fees including:

                              (i)  a statement about how performance fees affect administration fees and investment fees for a superannuation product, or management costs for a managed investment product; and

                             (ii)  the method for calculating the fees; and

                            (iii)  the amount of the fees, or an estimate of the amount if the amount is not known;

                     (c)  for tax--a cross reference to the "Tax" part of the Product Disclosure Statement;

                    (ca)  for insurance fees and other costs relating to insurance (if relevant)--a cross reference to the "Insurance" part of the Product Disclosure Statement;

                     (d)  if the product is subject to tax--whether the benefit of any tax deduction is passed on to the investor in the form of a reduced fee or cost;

                     (e)  an explanation of adviser remuneration that forms part of any fee or cost in the table, including (if known to the product issuer):

                              (i)  the method of calculation; and

                             (ii)  the amounts of commission or the range of amounts; and

                            (iii)  whether the amounts are negotiable or rebatable; and

                            (iv)  the way in which amounts may be negotiated or rebated;

                      (f)  an explanation of advice fees;

                     (g)  for a negotiated fee or cost--contact details of the person or body with whom the fee or cost can be negotiated and the manner of negotiation;

                     (h)  worked examples (if appropriate);

                      (i)  additional details of incidental fees (if appropriate);

                      (j)  details of transactional and operational costs such as brokerage and buy-sell spread, including:

                              (i)  a description of the cost; and

                             (ii)  the amount, or an estimate if the amount is not known; and

                            (iii)  how and when the costs are recovered; and

                            (iv)  a statement that the cost is an additional cost to the investor; and

                             (v)  whether any part of the buy-sell spread is paid to the product issuer or an external manager;

                     (k)  the following information about fee changes:

                              (i)  if applicable, a statement about the issuer's right to change the amount of fees without the investor's consent;

                             (ii)  any indexation arrangements that apply;

                            (iii)  the period of advance notice required for fee changes;

                            (iv)  any change in fee structure that is dependent on a person's employment;

                      (l)  if the issuer has instituted a flexible charging structure, for each applicable fee, if known:

                              (i)  any maximum, and when it would apply; and

                             (ii)  any waiver, and when it would not apply;

                    (m)  for a superannuation product--details regarding the protection of small accounts (member protection rules) unless already included in the Product Disclosure Statement.

Division 4A -- Defined fees for superannuation products

209A   Defined fees for superannuation products

                   The following definitions must be included for a superannuation product under the heading "Defined fees":

Activity fees

                   A fee is an activity fee if:

                     (a)  the fee relates to costs incurred by the trustee [OR the trustees] of the superannuation entity that are directly related to an activity of the trustee [OR the trustees] :

                              (i)  that is engaged in at the request, or with the consent, of a member; or

                             (ii)  that relates to a member and is required by law; and

                     (b)  those costs are not otherwise charged as an administration fee, an investment fee, a buy-sell spread, a switching fee, an exit fee, an advice fee or an insurance fee.

Administration fees

                   An administration fee is a fee that relates to the administration or operation of the superannuation entity and includes costs incurred by the trustee [OR the trustees] of the entity that:

                     (a)  relate to the administration or operation of the entity; and

                     (b)  are not otherwise charged as an investment fee, a buy-sell spread, a switching fee, an exit fee, an activity fee, an advice fee or an insurance fee.

Advice fees

                   A fee is an advice fee if:

                     (a)  the fee relates directly to costs incurred by the trustee [OR the trustees] of the superannuation entity because of the provision of financial product advice to a member by:

                              (i)  a trustee of the entity; or

                             (ii)  another person acting as an employee of, or under an arrangement with, the trustee [OR the trustees] of the entity; and

                     (b)  those costs are not otherwise charged as an administration fee, an investment fee, a switching fee, an exit fee , an activity fee or an insurance fee.

Buy-sell spreads

                   A buy-sell spread is a fee to recover transaction costs incurred by the trustee [OR the trustees] of the superannuation entity in relation to the sale and purchase of assets of the entity .

Exit fees

                   An exit fee is a fee to recover the costs of disposing of all or part of members' interests in the superannuation entity.

Indirect cost ratio

                   The indirect cost ratio ( ICR ), for a MySuper product or an investment option offered by a superannuation entity, is the ratio of the total of the indirect costs for the MySuper product or investment option, to the total average net assets of the superannuation entity attributed to the MySuper product or investment option.

Note:          A dollar-based fee deducted directly from a member's account is not included in the indirect cost ratio.

Investment fees

                   An investment fee is a fee that relates to the investment of the assets of a superannuation entity and includes:

                     (a)  fees in payment for the exercise of care and expertise in the investment of those assets (including performance fees); and

                     (b)  costs incurred by the trustee [OR the trustees] of the entity that:

                              (i)  relate to the investment of assets of the entity; and

                             (ii)  are not otherwise charged as an administration fee, a buy-sell spread, a switching fee, an exit fee, an activity fee, an advice fee or an insurance fee.

Switching fees

                   A switching fee is a fee to recover the costs of switching all or part of a member's interest in the superannuation entity from one class of beneficial interest in the entity to another.

Division 5 -- Example of annual fees and costs

210   Example of annual fees and costs

                   The example of annual fees and costs:

                     (a)  must contain fees and costs in accordance with the table in clause 211 or 212; and

                     (b)  must be set out using the headings and the form in clause 211 or 212; and

                     (c)  must be included in the 'Fees' section of a Product Disclosure Statement, following the fees and costs template.

211   Superannuation products--Example of annual fees and costs for a MySuper product

                   This table gives an example of how the fees and costs for the generic MySuper product for this superannuation product can affect your superannuation investment over a 1 year period. You should use this table to compare this superannuation product with other superannuation products.

 

EXAMPLE--- MySuper product

BALANCE OF $50 000

Investment fees

1.6%

For every $50 000 you have in the MySuper product you will be charged $800 each year

PLUS Administration fees

$52

($1 per week)

And , you will be charged $52 in administration fees regardless of your balance

PLUS Indirect costs for the MySuper product

1.2%

And , indirect costs of $600 each year will be deducted from your investment

EQUALS Cost of product

If your balance was $50 000, then for that year you will be charged fees of $1 452 for the MySuper product.

Note:       *   Additional fees may apply. And , if you leave the superannuation entity early, you may also be charged exit fees of between 0% and 5% of your total account balance (between $0 and $2 500 for every $50 000 you withdraw).

212   Managed investment products--Example of annual fees and costs for a balanced investment option

Example of annual fees and costs for a balanced investment option

This table gives an example of how the fees and costs in the balanced investment option for this managed investment product can affect your investment over a 1 year period. You should use this table to compare this product with other managed investment products.

 

EXAMPLE --the Balanced Investment Option

BALANCE OF $50 000 WITH A CONTRIBUTION OF $5 000 DURING YEAR

Contribution Fees

0-4%

For every additional $5 000 you put in, you will be charged between $0 and $200.

PLUS Management Costs

1.3%

And , for every $50 000 you have in the balanced investment option you will be charged $650 each year.

EQUALS Cost of balanced investment option

 

If you had an investment of $50 000 at the beginning of the year and you put in an additional $5 000 during that year, you would be charged fees of from:

$650 to $850 *

What it costs you will depend on the investment option you choose and the fees you negotiate.

*   Additional fees may apply:

Establishment fee --$50

And , if you leave the managed investment scheme early, you may also be charged exit fees of between 0 and 5% of your total account balance (between $0 and $2 500 for every $50 000 you withdraw)

213   Defined benefit funds

                   An example of fees and costs is not required in a Product Disclosure Statement for a defined benefit fund.

Note:          Defined benefit fund is defined in subregulation 1.03(1) of the SIS Regulations.

Division 6 -- How to fill in the example of annual fees and costs

214   Fees and costs must be ongoing amounts

                   The fees and costs stated in the example must be typical ongoing fees that apply to the MySuper product or investment option.

Note:          The example should not be based on "honeymoon rates". It must be consistent with the statement for an existing member or product holder having the stated balance and level of contributions each year.

214A   Example of annual fees and costs for a MySuper product--lifecycle MySuper product

                   If the example of fees and costs for a MySuper product uses a lifecycle MySuper product, the investment fee quoted in the example must be the highest investment fee for a lifecycle stage of the lifecycle MySuper product.

215   Minimum entry balance rule

                   If the minimum balance required to enter a superannuation entity or a managed investment scheme is greater than $50 000, the example of annual fees and costs must be based on an amount that is the lowest multiple of $50 000 that exceeds the minimum entry balance.

Example:    If a superannuation entity or a managed investment scheme has a minimum entry balance of $65 000, the relevant amount for the example of annual fees and costs is $100 000.

216   Exit fees

                   If an exit fee may be charged, it must be described in footnote to the table, based on:

                     (a)  a balance of $50 000; or

                     (b)  if clause 215 applies--an amount that is a multiple of $50 000.

217   Contribution fees

             (1)  The amounts of contribution fees to be inserted in the example of annual fees and costs for a managed investment product, are applied against a $5 000 investment.

             (2)  If a Product Disclosure Statement relates to a product:

                     (a)  that is paid for by a single lump sum amount; and

                     (b)  for which no additional contributions can be made;

the example of annual fees and costs should be modified by removing references to contributions or contribution fees.

             (3)  The example must be based on a balance:

                     (a)  of $50 000; or

                     (b)  worked out in accordance with clause 215.

Note:          If there is a fee paid for the initial contribution, it should be described as the establishment fee.

218   Administration fees and investment fees for a superannuation product

Administration fees

             (1)  The example of administration fees for a MySuper product or an investment option offered by a superannuation entity is applied to an amount of $50 000 or an amount that is a multiple of $50 000 if clause 215 applies.

Note:          In calculating the amount, do not include contributions that may be made during the year.

             (2)  If there is a range in the amount of administration fees that may be charged for a MySuper product or an investment option offered by a superannuation entity, the example must use the highest administration fees in the range.

Investment fees

             (3)  The example of investment fees for a MySuper product or an investment option offered by a superannuation entity is applied to an amount of $50 000 or an amount that is a multiple of $50 000 if clause 215 applies.

Note:          In calculating the amount, do not include contributions that may be made during the year.

             (4)  If there is a range in the amount of investment fees that may be charged for a MySuper product or an investment option offered by a superannuation entity, the example must use the highest investment fees in the range.

Indirect costs for a MySuper product or investment option

             (5)  The example of indirect costs for a MySuper product or an investment option offered by a superannuation entity must be worked out by applying the indirect cost ratio for the MySuper product or the investment option to an amount of $50,000 or an amount that is a multiple of $50,000 if clause 215 applies.

218A   Management costs for a managed investment product

             (1)  The example of management costs for an investment option offered by a managed investment scheme is applied to an amount of $50 000 or an amount that is a multiple of $50 000 if clause 215 applies.

Note:          In calculating the amount, do not include contributions that may be made during the year.

             (2)  If there is a range in the amount of management costs that may be charged for an investment option offered by a managed investment scheme, the example must use the highest management costs in the range.

             (3)  Management costs that are not deducted directly from a product holder's account must be calculated using the indirect cost ratio for the relevant investment option offered by the managed investment scheme.

             (4)  Any percentage based management costs that are deducted directly from a product holder's account should be added to the percentage amount calculated under subclause (3).

             (5)  Any dollar based management costs that are deducted directly from a product holder's account must be shown separately in the management costs cell.

Example 1: Management costs: 2 % deducted directly from your account + 1.6% deducted indirectly.

Example 2: Management costs: $52 per year ($1 per week) deducted directly from your account + 1.6% deducted indirectly.

Example 3: Management costs: $52 per year ($1 per week) + 1% deducted directly from your account + 1.6% deducted indirectly.

219   Withdrawal fees and exit fees

             (1)  The example of a withdrawal fee or an exit fee for a superannuation product or a managed investment product is applied against an amount of $50 000 or an amount that is a multiple of $50 000 if clause 215 applies.

             (2)  In calculating the amount, do not include contributions that may be made during the year.

220   If there is no generic MySuper product or balanced investment option

Superannuation entities

             (1)  If a superannuation entity does not offer a generic MySuper product, the example should be based on:

                     (a)  where the superannuation entity offers a balanced investment option--the balanced investment option under which most assets of the superannuation entity are invested; and

                     (b)  where the superannuation entity does not offer a balanced investment option--the investment option under which most assets of the superannuation entity are invested.

Managed investment schemes

             (2)  If a managed investment scheme does not offer a balanced investment option, the example should be based on:

                     (a)  where the scheme offers a default investment option--that option; and

                     (b)  where the scheme does not offer a default investment option--the investment option under which most assets of the scheme are invested.

Division 7 -- Consumer Advisory Warning

221   Consumer advisory warning

 

DID YOU KNOW?

Small differences in both investment performance and fees and costs can have a substantial impact on your long term returns.

For example, total annual fees and costs of 2% of your account balance rather than 1% could reduce your final return by up to 20% over a 30 year period
(for example, reduce it from $100 000 to $80 000).

You should consider whether features such as superior investment performance or the provision of better member services justify higher fees and costs.

Your employer may be able to negotiate to pay lower administration fees. Ask the fund or your financial adviser.

TO FIND OUT MORE

If you would like to find out more, or see the impact of the fees based on your own circumstances, the Australian Securities and Investments Commission (ASIC) website (www.moneysmart.gov.au) has a [superannuation or managed investment fee] calculator to help you check out different fee options.

222   Where to place the Consumer Advisory Warning

                   The Consumer Advisory Warning must be located at the beginning of the fees section of the Product Disclosure Statement.

Part 3 -- Fees and costs in periodic statements

Division 1 -- Other Management Costs

301   Indirect costs related to investment and administration of accounts

             (1)  The following text and the appropriate amount, in dollars, must be inserted after the part of the periodic statement that itemises transactions during the period.

 

Indirect costs of your investment

                   This approximate amount has been deducted from your investment and includes amounts that have reduced the return on your investment but are not charged directly to you as a fee.

             (2)  The amount inserted must include:

                     (a)  for a MySuper product or an investment option offered by a superannuation entity--the indirect costs for the MySuper product or investment option; and

                     (b)  for an investment option offered by a managed investment scheme--all management costs not deducted directly from a product holder's account during the reporting period.

             (3)  The amount must be shown as a single total amount in dollars.

             (4)  The amount for a managed investment product must be calculated by multiplying the indirect cost ratio for the relevant investment option by the product holder's average account balance for the option over the reporting period.

Division 2 -- Total fees

302   Total of fees in the periodic statement

             (1)  The following text and the appropriate amount, in dollars, must be displayed:

                     (a)  at the end of the part of the periodic statement that itemises transactions during the period; or

                     (b)  in a summary part of the periodic statement.

TOTAL FEES YOU PAID

This approximate amount includes all the fees and costs which affected your investment during the period.

             (2)  The total fees you paid are the total of all fees and costs disclosed in the periodic statement.

Division 3 -- Additional Explanation of Fees and Costs

303   Matters to be included as additional explanation of fees and costs

Superannuation products

             (1)  The following information must be included in the periodic statement for a superannuation product under the heading "Additional Explanation of Fees and Costs", if it has not been included in another part of the periodic statement:

                     (a)  details of any activity fees, advice fees and insurance fees that were incurred by the member during the period;

                     (b)  for a superannuation product that is subject to tax--whether the benefit of any tax deduction has been passed on to the investor in the form of a reduced fee or cost.

Managed investment products

             (2)  The following information must be included in the periodic statement under the heading "Additional Explanation of Fees and Costs", if it has not been included in another part of the periodic statement:

                     (a)  details of incidental fees, such as cheque dishonour fees, that were incurred by the product holder during the period;

                     (b)  details of any service fees that may have been incurred by the product holder;

                     (c)  for a managed investment product that is subject to tax--whether the benefit of any tax deduction has been passed on to the investor in the form of a reduced fee or cost.




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