For high-fees payer Terry it’s ... Time to shop around

Q My wife and I both have allocated pensions with the same adviser from which we receive our monthly pension payments. The combined fees deducted from our accounts and paid to our financial adviser amount to around $860 a month. On top of this the management and trustee fees amount to about $165 a month, making a total of $1025, which is deducted from our cash account. Do you think these fees are reasonable?

We are looking to ask for a fee-for-service arrangement with our fund, as the deduction of these fees on a monthly basis not only seems excessive but also reduces the amount of interest we receive on our cash account over a year.

Is it possible to change to a fee-for-service arrangement and do you think it would be to our advantage to do so?

A It’s difficult to determine whether the roughly $12,000 a year you’re paying in various fees is worthwhile without considering the size of the account and the type of advice you’re receiving. If you have a large account that requires lots of attention, the fees may in fact be quite reasonable.

On the other hand, if you have a smaller account and receive irregular advice, $12,000 may be quite excessive.

As with many goods and services, whether it be cars, mortgages or even lawn mowing, often the best way to determine whether you’re receiving good value is to shop around.

Make a short list of financial advisers to approach by doing your own research and checking with your friends and family whether they are happy with their financial advisers. Give the advisers a call and see what they charge for similar levels of service. Knowledge is power.


Send your questions to:

Paul’s Answers, Money magazine, GPO Box 3542, Sydney NSW 2001 or This email address is being protected from spambots. You need JavaScript enabled to view it. .

Sorry, but Paul can’t personally answer your questions other than in the Q&A column.


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