Vanguard Super lowers fees


Vanguard Super is reducing its annual administration fees off the back of strong investment performance and its short time in the market.

All members will see annual administration fee go from 0.35% to 0.33% per year and the admin fee cap lower from $850,000 to $300,000.

Most options will see a reduction in annual fees comprising admin, investment, and transaction costs to 0.56% p.a.

vanguard super lowers admin fees

"This change will result in Vanguard Super's default Lifecycle product being one of the lowest cost options for Australians across a range of ages and superannuation balances, and more than 30% lower cost than the industry average," says Vanguard Investments Australia managing director Daniel Shrimski.

The Lifecycle option automatically adjusts its investment mix according to the member's age. On a balance of $50,000, a member will now pay $280 (0.56%) compared to the industry average fee of $479 per annum.

It has returned 14.7% p.a. for members aged 47 and under in 2023, which is 4.65% above the industry median.

For balances above $300,000, the annual fee for most investment options drops to 0.28% p.a.

Shrimski says: "Following a successful 18 months in market, we're pleased to be able to start delivering on our promise at launch to members to further lower fees, just like we have continued to do for our non-super clients over 27 years in Australia."

Assets under management has grown to more than $1 billion. About 65% of the membership is invested in the Lifecycle option; their average age is 40 years old.

"As a new entrant in the system observing the state of play, we've found there is no single tool or standardised comparison framework that adequately meets consumers' need for clear, accessible information on fees across superannuation funds," Shrimski says.

"This is concerning, and perhaps the reason why our research is showing year on year that nearly one in two Australians don't know what they pay in super fees and continue to be disengaged with their super."

Vanguard recently launched its pension products - account-based pension SpendSmart and transition to retirement option TransitionSmart.

This article first appeared on Financial Standard

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Karren Vergara is a financial journalist with Financial Standard, covering wealth management, including superannuation, banking and financial planning. Prior to becoming a journalist, she was an accountant for more 10 years. She has a diploma in journalism and Bachelor's degree in business, both from UTS.