Media Release: An Australian-first: InvestSMART caps investment fees

SYDNEY, November 12 2018: For the first time in Australia, direct investors now have access to capped investment fees, no matter the size of their investment.

Fees for the InvestSMART Diversified Portfolios start at just $99 per annum for clients with lower balances. For those with higher balances of $82,000 and over, fees are capped at $451 per annum (including all administration costs), excluding indirect costs such as ETF management costs and brokerage, which are the lowest in the industry at $5.50 or 0.11% (whichever is greater)¹.

Commenting on the launch, InvestSMART CEO Ron Hodge said: “Our mission is to make wealth happen for all Australians and to raise awareness of the impact of fees and costs on investor portfolios. Nowadays, there is no need for investors to sacrifice their long term investment returns to fees.

“On a 30-year investment, an annual fee of 2% means losing 45% of potential portfolio value to fees². For clients with over $1 million, InvestSMART’s annual fee would be just $451, or 4.5 basis points (0.045%), perhaps the lowest in the world. This makes a huge difference to long-term returns, whatever the investment amount.”

At the recent launch of InvestSMART’s research paper, ‘How fees can destroy your wealth: Understanding the total cost of investing’², InvestSMART Chairman Paul Clitheroe highlighted the importance of fees to investor returns.

“You can’t control your returns, but you can control your costs,” he said.

Greater control, lower costs

Under InvestSMART’s Professionally Managed Account (PMA) platform, investors hold their shares in their own names. They can also make regular contributions and withdraw with ease if they wish to terminate the capped fee arrangement.

“Investors can combine our model portfolios in any proportion they choose, creating a portfolio that is tailored and unique to their individual investment objectives and needs,” Mr Hodge said.

For the capped fee, investors get

• online account viewing,
• regular rebalancing of the portfolio by an experienced investment team,
• annual tax statements, and
• regular performance reports.

“We think this model will appeal to all investors – from those starting out to the more experienced. It’s about time investors who want a professionally managed investment portfolio have a low, fixed fee option. Our new PMA platform provides this,” Mr Hodge said.