Superannuation – a fee reduction…?

A smallish portion of my superannuation is held in a retail fund.   This has arisen for historical reasons, and I’ve accepted the arrangement, notwithstanding the fact that the notional fees payable are higher than other accounts that I have (in “industry” funds).    Part of the reason for the higher fees is that they incorporate a “trailing commission” paid to an investment advisory group.    In fact, over the years, this has been money reasonably well-spent, as I’ve received very useful advice and assistance from the advisers concerned, particularly as the rules have changed over the years.  I can’t complain that I’ve been in the “fee for no service” category, because they have always been most persistent in summoning me in for an annual review.  And the amount that they’ve been receiving has, at least in recent times, been disclosed – although seemingly drowned in all the other paperwork that supposedly they’re required to give me.

I say “advisers” because the advisory business has changed hands several times in the 30 or so years since I first dealt with it.   I’ve accepted that, because the individual advisers that I’ve dealt with until recently have all been knowledgeable and helpful.

However, to cut a long story short, the adviser is now part of the AMP advisory operation, and the individual that I’ve now ended up with is younger and, frankly, constrained by the red-tape that presumably has now been imposed across the whole sector.      Moreover, at this stage of my life, barring major legislative change, I can’t see the need for any significant advice going forward – at least, until while I’m around.  In fact, the one reason for maintaining a relationship is that the advisory group has a general idea of what accounts I have and would be the logical “go to” point when these have to be rearranged when I’m no longer here.

But, I have now received a communication from the fund concerned that it’s about to reduce the investment fees that it charges by quite a significant percentage.   On closer examination, most of the reduction is off-set (at least, in my case) by the fact that the fund concerned is also ceasing to pay trailing commissions.   I’m not sure if this has become a legislative requirement, or whether it is just regarded as inevitable.

Of course, it’s nice that (indirectly) the cost to me of having funds invested in this fund will decrease.  But, the next inevitable step will obviously be – how is the investment advisory group going to react to the loss of this income stream?   I foresee that they’re going to have no alternative to ask me to pick up the tab in some form or other.  I await with interest to see how this will be expressed.   And, at this stage, I have no idea how I might respond!