# ING Living Super Fee Structure Is Changing



## Bill M (22 March 2017)

As some of you may know, I am a member of ING Living Super and I have posted many articles on the product. I have had nothing but praise for the product, it is as close as you can get to having a SMSF without actually going all the way and having one. It is a low fee fund and you can buy and sell your own stocks and there are no fees for cash or term deposits and the Balanced Category.

*All this is changing on the 1st. June 2017.* It will impact most members and it will impact me very much so. On a fee basis it will be very close to any industry fund now.

As an example, lets assume you have a 300K account and you are invested in the shares category (this is the pick your own shares category). Currently, there is a $300 per year fee for this feature. This will now jump to a .64% fee. In other words that 300K in shares will incur a fee of $1,920. Plus there will be a new admin fee of $5 per Month per account. So for this theoretical account of 300K it jumps from the current $300 per year fees to $1,980. That is a massive increase.

I am not sure what I will do at this moment and I am considering my options at this time. Anyone have any ideas or suggestions or know of other super funds that might suit me better?

For further info please click on the link below.
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Shares - A 0.50% p.a. Administration fee will replace the current $300 p.a. fee for the Shares investment category, capped at $2,500 p.a
https://www.ingdirect.com.au/assets/pdf/SignificantEventNotices20160321.pdf
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## willy1111 (22 March 2017)

Might be a good time to look at esuperfund.com.au

I signed up last year and found the process quite easy, haven't done a return as yet, but expect it won't be that complicated. Lots of info/material on the site.

Expect it to cost roughly $1,100 per year to maintain.


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## Junior (22 March 2017)

Woah....that is a huge increase.  I think Australian Super still only charge a flat dollar fee for their Member Direct option where you can access direct shares/ETFs.

eSuperfund is an option, but then you are taking on all the responsibility and administrative burden that comes with running your own Fund.


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## Bill M (22 March 2017)

Junior, I was going to PM you about this as I know you were interested in this Super Fund. I thought it was too good to be true, they will no longer be any different to the others once the new fees come in. I think there might be massive rollovers out in time to come.


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## Junior (22 March 2017)

There's this growing trend with banks to offer introductory rates, introductory pricing and special deals for new customers.  It's usually confined to deposit rates, mortgages and credit cards, in this instance ING are doing it with super.

It's like reverse loyalty, they entice you in, and then screw you over once you are embedded in the system as they know most clients won't notice or won't be bothered to switch out!

I'm disappointed in ING, I thought they were different to the majors.  The took away the 2% rebate on debit card purchases recently as well.


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## Iggy_Pop (22 March 2017)

Australian Super is $395 per year plus brokerage which is reasonable
https://www.australiansuper.com/investments-and-performance/member-direct/member-direct-fees.aspx

The challenge is to swap funds, my understanding is you cannot move shares between funds, so would need to sell your shares which will result is a capital gain, transfer the money, rebuy the shares in Australian Super who may potentially down the track change their approach as well. 

Wish you luck, it might be easier to pay the fees?

Iggy


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## Bill M (23 March 2017)

Iggy_Pop said:


> Wish you luck, it might be easier to pay the fees?



Thanks Iggy, that's what I was thinking too. You can roll out and then Australian Super might ending up doing the same later on down the track.

So my choices are:

Start an ESuperfund account which will cost $1,100 p/y to maintain.
Stay where I am and pay the $2,000 + fees.
Give Australian Super a go but they may do the same later on.

My least preferred is ESuperfund, but seriously if fees are going to rise so dramatically with these Super Funds I might have no choice but to do it myself.


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## Junior (23 March 2017)

Bill M said:


> Thanks Iggy, that's what I was thinking too. You can roll out and then Australian Super might ending up doing the same later on down the track.
> 
> So my choices are:
> 
> ...




The benefit of eSuperfund is that you now run an SMSF, and will have portability.  i.e. can retain all investments even if you change administration service, or use a different accountant.  Downside is the need to have tax returns and audit done each year, and high administrative burden.

Other option I guess is to run two platforms for a while, i.e. if you have significant capital gains in ING leave them there for now and transfer some funds over to Australian Super to reduce your overall fee.  Having said that, I assume you are in pension phase which means tax may not be an issue.


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## Bill M (23 March 2017)

Junior said:


> Other option I guess is to run two platforms for a while



OK, now I am being lazy to look it up so I will ask you. Am I able to rollover say 50% of my ING Pension to another pension? Or do I have to withdraw the lot? (Yeah I know, not advice only banter)

I do have an accumulation account with ING too but there is only 6K in it. I got to close that off as it is not worth paying admin fees on that one. Maybe transfer that over to Australian Super.

What I could do eventually is leave the cash term deposits with ING as the fee is small and transfer the remainder to Australian Super (the shares component). 

Maybe running 2 platforms might the go.


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## InsvestoBoy (23 March 2017)

Hey Bill,

Thanks for raising this!

I'm still a relatively young working dude. I will say straight up that I have about $75k in super. Not that much compared to retirees who have been saving all their lives, but it is still a lot for me and the beginning of a nest egg for retirement. I always tried to be really careful with it over the years unlike most of my peers and was proud when I managed to go to cash in August 2008 before the worst of the GFC hit. 

I originally signed up for ING Living Super because they had a good offering for share trading. Nothing hectic for me I just wanted to be able buy a few ETFs and LICs that you can't get from the options most supers provide.

Then about 6 months ago I got a job at a very large Australian Investment Bank, and discovered they have strict regulations about share trading, embargo against certain holdings, holding periods, etc etc.
So I ended up closing the share trading portion of the account  and switching to "Balanced" which was acceptable for the employer, fee-free and perfect for me because I thought a 50% allocation to stocks seemed good at current valuations. Happy days.

To me it seemed sort of logical why it was fee-free, I figured they were willing to eat the 0.2% cost the likes of Vanguard charges for a similar portfolio, to get the 50% of the "Balanced" option in the cash which counts as deposits for them.

Now from the PDF I can see there will be a total fee of $505 for a $50,000 example balance, which is 1%! When inflation in Australia is at a 19 year low of 1.5%!

Not to mention they are changing the allocation from something simple and conservative (50/50 cash/stocks) into a pretty random mix of investments, and even admit in the PDF *"The risk level for this option will change from Medium-High to High risk."*, how the hell does that match the term "Balanced"!

Really unhappy about all of that!

Does anyone know of any super which provides fee free balanced option like ING had?


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## Bill M (24 March 2017)

InsvestoBoy said:


> Now from the PDF I can see there will be a total fee of $505 for a $50,000 example balance, which is 1%! When inflation in Australia is at a 19 year low of 1.5%!



That's my thoughts too. Buy the way they are even going to charge up to .14% for your cash, claiming for the Operational Risk Financial Requirement (ORFR). Their current 1 year term deposit is down to 2.60%, factor in the new admin fees and the ORFR, it brings that TD down to nearly 2.4%.

Congratulations on your super savings, well done. I really think that a younger person who knows what they are doing should probably open a SMSF with ESuperfund. You obviously know how to save and invest well. It's a bummer that you have restrictions on buying certain stocks. I am still weighing up my options, we have 2 full Months to think about it, good luck.


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## Junior (24 March 2017)

Bill M, yes you can 'commute' part or all of your pension back into accumulation phase, and then roll it over to another fund and start a new pension.

Of course, seek advice on this or do your own research, as there can be all sorts of implications in doing this.  Some pensions are 'grandfathered' based on old rules, so starting a new one can remove grandfathering.


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## joku (28 March 2017)

My mums super fee is increasing from $300 to $3470 pa on the direct shares component (ie. the majority of her fund) assuming the 0.03-0.14% component turns out to be 0.14%.

More than 11x increase in fee! (about 6-7x increase across her whole fund)

Not only that, but we have been shifting large amounts of her equity into ING super in the last 12-18mths through non-concessional cap and bring forward rule in anticipation for switch to pension, so we have very recently incurred at a guess somewhere between $1500 and $2500 in brokerage to get into this fund. Now if we want a highly competitive fee structure we were previously getting we will have to switch fund, probably to SMSF which was our original intention before being sucked in by this incredibly nasty bait and switch that ING has pulled. I'm guessing the move will not only incur brokerage costs again, but incur them three times over in total to sell and then re-buy in new fund because I very much doubt that we can directly transfer the holdings.

On top of all that, there is the tax inefficiency and lost profit from slow transaction processes from all this switching in and out. ING also fumbled around for over 2 weeks with account accessibility on the original significant lump sum, constantly missing their advised timeline and telling us multiple times that the account should now be available when it wasn't.

If you can't tell, I'm really pissed! Thinking I should at least contact a lawyer and see what they think but mum will probably want to avoid that.


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## Bill M (28 March 2017)

joku said:


> My mums super fee is increasing from $300 to $3470 pa on the direct shares component (ie. the majority of her fund) assuming the 0.03-0.14% component turns out to be 0.14%



joku, I know how you feel and I certainly sympathise with the bait and switch comment. Just one thing you need to check out before your Mum does anything, the fees are capped at $2,500 on the shares component. 

It comes down to this, eSuperfund with yearly fees for around $1,100 (as reported by another member) or ING Living Super doing all the compliance for $2,560 (including admin fees). That's where I am at the moment and I have 2 Months to give it some thought.

Let us know what your Mum decides, I would say thousands of people out there will be re-considering their options, cheers.


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## joku (28 March 2017)

If I understand right the 0.14% fee is not capped together with the 0.5% fee. That's how my calc gets to ~$3500.

This is partly about principle for me and I expect mum will agree. The fee increase is disgusting and it's particularly disgusting after we've only just contributed significant lump sums and so only just incurred thousands in brokerage, on a capital weighted basis we've barely enjoyed the service for a few months. ING should rebate mums brokerage, I bet I could make it happen via legal action but it's not much money, might just wave my arms around with some government bodies.

Either way I think all of us will be leaving ING out of principle, personally I'm not heavily impacted but they can get stuffed for pulling this BS. It's not a first for ING and yeah it's pretty common in banking, but on a relative basis it's the worst fee increase I've experienced by a long shot for any service in any industry.


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## Junior (28 March 2017)

Joku, perhaps if you go berserk at ING you might manage to have the fee reduced or waived for a period of time.  Then look to transition across to another fund.

I don't know what they are thinking with this aggressive fee increase.


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## Bill M (28 March 2017)

joku said:


> My mums super fee is increasing from $300 to $3470 pa on the direct shares component (ie. the majority of her fund) assuming the 0.03-0.14% component turns out to be 0.14%.



My bad, I just re-read the announcement and you are correct. The .14% applies to the total account balance. These fees with ING are getting way out of control, let us know what you end up doing.


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## InsvestoBoy (29 March 2017)

When I started my new job I handed in the ING Super letter to make sure my super got deposited there rather than in employer fund.

I was feeling a bit sick this afternoon so left early and been asleep until just now, when I woke up I noticed there is a letter from employer fund on my desk (run by AMP it seems). So out of curiosity I logged in and saw the employer has ignored my ING letter and been depositing super into the AMP fund already.

After looking at the fees, it's 0.79% all up (not including the life insurance fees) for their default balanced option. Still much more expensive than FREE, but about the same as Australian Super and a couple of others I looked at and much cheaper than ING. 

So I guess I am going to roll over to my employer fund.


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## So_Cynical (29 March 2017)

ING have been operating in Aust for about 10 or 12 years, building market share with very low cost products and even giving away money with that everyday bank account that paid you back like 2% of the monthly withdrawals, that was stopped about 12 months ago and now the super party is over.

I hate banks, i hate super funds.


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## InsvestoBoy (29 March 2017)

Hi So_Cynical,

Yes. I originally opened my ING Online Saver account over 10 years ago because they were giving away $123 dollars to anyone who opened an account. Happy to keep that account as it's only a hole to store some liquidity (I also have similar accounts with 3 other banks), and still fee free like most of the internet-only savings accounts.


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## Junior (29 March 2017)

So_Cynical said:


> ING have been operating in Aust for about 10 or 12 years, building market share with very low cost products and even giving away money with that everyday bank account that paid you back like 2% of the monthly withdrawals, that was stopped about 12 months ago and now the super party is over.
> 
> I hate banks, i hate super funds.




Agree with this.

I have always been a big fan of ING due to their pricing & good customer service.  And no issue with them ending the 2% cashback, given that all ATM withdrawals are still rebated and there are no other fees.  It is easy and free to change bank accounts, not so with superannuation.

This Living Super situation is very very poor!!  I never saw mention that the 0% MER was for a limited time only....super is a long term prospect, product providers should not be permitted to impose such dramatic fee increases with little to no warning!  If they couldn't afford the original offer they never should have put it on the table in the first instance.


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## Movendi (10 November 2017)

If not going SMSF then what other good options are left? Australian Super?


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## InsvestoBoy (18 February 2018)

I am currently with my employer default super option, AMP Signature Super. We receive discounts on the usual fee otherwise it would be too expensive.

But I have been investigating SunSuper. They have the cheapest fees I have seen of any super fund. Very likely I will switch to them after my employer makes the contribution from this months pay packet.

See here: https://www.sunsuper.com.au/members/investments/investment-fees


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