I understand that the new 3% fee cap on superannuation balances under $6,000 is assessed on 30 June 2020 balances. This creates potential for some profits. If I have an account balance of $300k and my fee for the year is say 0.70% for example, $2,100 for the year. If I was to transfer $295k out of current account to a new account, leaving only $5k in my current account, the maximum I could be charged for my $5k account is 3% or $150. Because I have paid $2,100 throughout the year, i would get a fee rebate of $1,950. Anyone have thoughts on this as a strategy?
3% fee cap on superannuation
Jdog88 on 17/06/2020 - 16:02
Comments
it'd be a different fund so it wouldnt matter. rinse and repeat next year.
Well the other fund will still charge fees on that amount, wouldn't they?
So, in total you would still be charged fees on the full $300k; just now you would be paying 3% fees on 5K instead of 0.7%. To top that, you should also look at fees for transfers because you would be selling out from your current investments and buying into new investments. I would expect there to be some sort of buy-sell spread as well.
yes but only if the funds were in the new account for a full year. if i partially transferred again (leaving less than $6k) before the end of the next financial year then i would get another rebate of the fees i paid on the balance.
There are plenty of industry funds out there that dont charge a buy-sell spread.
Fees are pro rata.
only on full withdrawal and account closure if done before end of FY. What i'm proposing is partial rollover leaving less than $6k in the account.
Good luck to you.
What about the fees that will be charged on the 295k in the new account?