Ask Paul: We've paid $60k in fees for almost no advice - what now?


Published on

Dear Paul,

I wrote to you about three years ago, but I was never acknowledged in your Q&A column. I know that you must be overwhelmed with questions, but I am trying again.

I am 79 and my wife is 72. I have been working up to now, but with all the lockdowns in Victoria the company I work for is closing.

ask paul clitheroe 60k in fees no advice industry fund

During the years we have accumulated $800,000 each in MLC. For 22 years we each paid about $120 monthly to an MLC adviser for virtually no advice.

Reluctantly, now is the time to hang up my boots. As I have no other income, I need to start drawing a pension.

I am thinking of switching to an industry balanced pension fund (set and forget) seeing that I know nothing about the stockmarket.

The question is, which one? In Money's 2019, 2020 and 2021 Best of the Best, AustralianSuper, Hostplus, Sunsuper and Cbus caught my attention.

With your valued knowledge, if you were in my position, where would you invest?

Our house is fully paid off and we have no other income. Would it be a good idea for each of us to go into two different funds so as not to have all our eggs in one basket. - Carlos

I am very sorry I could not get a personal response to you the last time you wrote, Carlos. I would love to be able to respond to everyone personally, but that is not always possible.

Thanks for your understanding of this. I am very pleased I can answer this time.

You certainly made me laugh with "reluctantly hanging up your boots" at age 79. You have a great attitude!

Your question is very relevant to many readers, and I include myself here. At age 66 I am going through pretty much the same thought process as you are, to keep my super with a high-quality manager at very low cost.

Due to my long-term employer, I also have some super with MLC, but not with advice. The growth fund I have has performed well.

I am really annoyed about the impact of this fee on your super balance. $120 a month is significant.

And for no advice it is outrageous. I suggest you talk to MLC about this. Fees-for-no-advice is a hot topic. I believe there is a simple argument that you should be refunded this money.

$800,000 each is a significant super amount, and I would not hesitate to speak to a fee-charging professional adviser if you wanted a detailed opinion on your options.

But putting your funds with a low-cost balanced option with any of the names you list makes complete sense.

If you have two separate accounts, you could use two different managers, but we are splitting hairs here. The reality is that these huge balanced funds own very similar assets and in roughly the same proportion.

I am all for not having all your eggs in one basket, but to achieve genuine diversification you would need to find two managers holding quite different assets.

I believe you will be very well diversified with any one of these managers.

My very best wishes for your retirement and I hope you enjoy the income that will flow from your super. You have worked plenty long enough.

Get stories like this in our newsletters.

Related Stories


Paul Clitheroe AM is founder and editorial adviser of Money magazine. He is one of Australia's leading financial voices, responsible for bringing financial insight to Australians through personal finance books, the Money TV show, and this publication, which he established in 1999. Paul is the chair of the Australian Government Financial Literacy Board and is chairman of InvestSMART Financial Services. He is the chair of Financial Literacy at Macquarie University where he is also a Professor with the School of Business and Economics. Ask Paul your money question. Unfortunately Paul cannot respond to questions posted in the comments section. View our disclaimer.