WealthO2 has lowered the administration fee on its Super Simplifier product by 3.3 basis points and is capping fees at $1,760 per member or $3,630 across six family members, from 1 June, 2021.
Shannon Bernasconi, WealthO2 managing director, said the reduction came as more advisers were adopting WealthO2’s Super Simplifier into their practice.
“WealthO2’s philosophy is to align its business with that of advisers and their clients, and this fee reduction is in line with that philosophy,” Bernasconi said.
“As our business has grown, our ability to reduce the overall fund costs has increased, and we are passing on this scale benefit to the many advisers and their clients who have helped make this happen.
“This fee reduction, coupled with no minimum fee, makes Super Simplifier a very cost-effective product for those advisers looking to provide a market leading advice offering for super and pension clients, as well as provide a profitable service to the typically lower balance adult children of existing clients.”
Bernasconi said that while price was an important factor when choosing a super fund, an adviser’s best interest duty requires more than a focus on cost.
“Super Simplifier gives members the personalisation, transparency and flexibility of a self-managed superannuation fund (SMSF) but for a fraction of the cost.
“It is the only a low cost offering of its type in the market, and offers full transparency of assets through the use of the HIN [holder identification number] structure and managed accounts.
“Unlike traditional platform offerings, all listed assets managed on WealthO2 are in the member's designation name on HIN at a broker.
“All managed funds are held beneficially in a segregated WealthO2 uXchange account and all term deposits and at call funds are held in the member designation name through an Australian Money Market account.”
Bernasconi said in any adviser practice, the total cost to client comes from both the cost to access the platform and the cost the adviser charges.
“The resulting profit margin for the adviser comes from how much the upfront advice document and process costs, and how efficiently that ongoing advice is managed,” Bernasconi said.
“When it comes to lowering advice costs and increasing practice profitability, only the newer technology platforms like WealthO2 can afford to shift the margin from a product-led/ product-paid approach, to an advice-led and advice-paid focus.
“Platforms that haven’t kept up with the latest developments in technology have a higher cost of operation that is often recouped through hidden or layered fees.
“Hence the newer investment platforms like WealthO2 that don’t rely on cash fees, MER uplift or separately managed account (SMA) fees for revenue, can lower the overall cost to the client even further.”