Re: Octaviar MFS Premium Income Fund PIF
.....The difference being that I did not try to mislead!!!
.....The difference being that I did not try to mislead!!!
Wellington Capital PIF/Octaviar (MFS) PIF
- Thread starter breaker1
- Start date
Re: Octaviar MFS Premium Income Fund PIF
I was of course aware that the published fees are 0.7% per annum however as Dora has pointed out that represents Fees before costs.
I based my analysis on the average of a range of these type of funds I have invested in over the years
However I am more than happy to stand corrected and be enlightened in this matter
The average expense rate for personal superannuation funds was 2.12 per cent at the end of 2006 down from 2.30 per cent in 2004, according to Rice Warner's recent Superannuation Fees Report published on behalf of IFSA.
Rice Warner quotes increased average balances and strong market performance as the key drivers of the reduction in fees over the past two years. Some super funds charge lower fees on higher investment balances, which would reduce the average fee paid.
The average expense ratio is split across administration costs (0.80 per cent), investment management costs (0.77 per cent) and adviser costs (0.55 per cent). Advisor costs are based on sample data of commissions actually paid from several financial institutions.
The types of fees charged on personal super varies from fund to fund and will depend on the investment options you choose amongst other things. So, it's important to compare fund fees before you invest. Look at things like contribution fees, adviser commissions and management fees as these can all add up over time.
I was of course aware that the published fees are 0.7% per annum however as Dora has pointed out that represents Fees before costs.
I based my analysis on the average of a range of these type of funds I have invested in over the years
However I am more than happy to stand corrected and be enlightened in this matter
The average expense rate for personal superannuation funds was 2.12 per cent at the end of 2006 down from 2.30 per cent in 2004, according to Rice Warner's recent Superannuation Fees Report published on behalf of IFSA.
Rice Warner quotes increased average balances and strong market performance as the key drivers of the reduction in fees over the past two years. Some super funds charge lower fees on higher investment balances, which would reduce the average fee paid.
The average expense ratio is split across administration costs (0.80 per cent), investment management costs (0.77 per cent) and adviser costs (0.55 per cent). Advisor costs are based on sample data of commissions actually paid from several financial institutions.
The types of fees charged on personal super varies from fund to fund and will depend on the investment options you choose amongst other things. So, it's important to compare fund fees before you invest. Look at things like contribution fees, adviser commissions and management fees as these can all add up over time.
- Joined
- 11 July 2008
- Posts
- 263
- Reactions
- 0
Re: Octaviar MFS Premium Income Fund PIF
I am so sad that i dont have any shares in WC / Dane ///
I am so sad that i dont have any shares in WC / Dane ///
Re: Octaviar MFS Premium Income Fund PIF
On top of the $16,091,892.00 management fee paid to MFS in 2007 they also received $821,250.00 in Administration costs as well as any surplus in the fund after all costs were met. I think JH was pretty safe in saying WC would not be taking any of the surplus anytime soon! Seamisty
Re: Octaviar MFS Premium Income Fund PIF
I would much prefer WC at the helm charging 0.7% per annum(inclusive of GST) of the gross assets under management, which will not take place until unitholders have received their 3cent divvy than what Citi Pacific are paying!!!:::: The parent has just booked $71 million in "fund management" fees for the year to June, even though investors in its funds can't get their money back and receive no distributions::::: and this was based on 1 billion dollars of original investment, I have no idea what the current valuation is worth. Do your sums and dry your eyes, at least we have a RE who is working on keeping the PIF as a going concern, lets all hope it is not temporary.Seamisty
Re: Octaviar MFS Premium Income Fund PIF
Seamisty
Have a close look at the figures for managing a fund particularly the average costs for Financial Advisors
They still get paid from our money permanently even though they have put their clients into what amounts to Ground Zero
It is little wonder we were inundated with these people on the Forum incognito before the vote
I wonder if a certain individual at OCV is still raking in a commission for providing you with advice ?
However i know you dont hold any grudges and remember, to err is human to forgive devine
Seamisty
Have a close look at the figures for managing a fund particularly the average costs for Financial Advisors
They still get paid from our money permanently even though they have put their clients into what amounts to Ground Zero
It is little wonder we were inundated with these people on the Forum incognito before the vote
I wonder if a certain individual at OCV is still raking in a commission for providing you with advice ?
However i know you dont hold any grudges and remember, to err is human to forgive devine
Re: Octaviar MFS Premium Income Fund PIF
I wonder if a certain individual at OCV is still raking in a commission for providing you with advice ?quote Jadel:::???? I'm not sure what u mean Jadel, the staff member we used to deal with at OCV was one of the first to go in the big wind down when CS got on the board. That particular staff member on several occasions signed off on correspondence as 'senior financial adviser', which in hindsight I don't think was any more qualified than myself to give advice. Also if I was paying someone with those credentials, I would expect them to at least know that perpetual nominees were just a figure head and the PIF assets were not held separately by them so they could not be accessed by MFS who 'did not invest any money from the PIF in any way to products, subsiduaries etc owned by MFS'. I am no longer angry with that staff member, I think the majority of employess were conned along with the rest of us. However, I have not forgiven Michael King, Andrew Peacock and other board members who illegally stripped the PIF to prop up other MFS products. These are the ones who erred in my opinion, you can forgive them if you like, but this is one grudge I will be holding on to for quite some time. SIGH, does that mean I have to be 'un devine' Jadel? (Does that mean I can't wear my crown anymore?):grinsking
I wonder if a certain individual at OCV is still raking in a commission for providing you with advice ?quote Jadel:::???? I'm not sure what u mean Jadel, the staff member we used to deal with at OCV was one of the first to go in the big wind down when CS got on the board. That particular staff member on several occasions signed off on correspondence as 'senior financial adviser', which in hindsight I don't think was any more qualified than myself to give advice. Also if I was paying someone with those credentials, I would expect them to at least know that perpetual nominees were just a figure head and the PIF assets were not held separately by them so they could not be accessed by MFS who 'did not invest any money from the PIF in any way to products, subsiduaries etc owned by MFS'. I am no longer angry with that staff member, I think the majority of employess were conned along with the rest of us. However, I have not forgiven Michael King, Andrew Peacock and other board members who illegally stripped the PIF to prop up other MFS products. These are the ones who erred in my opinion, you can forgive them if you like, but this is one grudge I will be holding on to for quite some time. SIGH, does that mean I have to be 'un devine' Jadel? (Does that mean I can't wear my crown anymore?):grinsking
- Joined
- 5 June 2008
- Posts
- 105
- Reactions
- 0
Re: Octaviar MFS Premium Income Fund PIF
Can one of you legal eagles please answer this question:
If the class action that is seeking to determine when the PIF became insolvent and persisted in trading....(maybe April 2007) succeeded, would all investors who bought into the PIF post that date be paid out in full?
If this is so, what if they had sold their shares? That would be a double whammy to the PIFinvestors left behind, because the new share-holder would be entitled to their $1/unit, if it ever gets to there, and the original investor would also get paid out!
Scary stuff....or am I wrong here? What is their chance of succeeding here; I know Jenny is defending it vigorously, BUT!!
Can one of you legal eagles please answer this question:
If the class action that is seeking to determine when the PIF became insolvent and persisted in trading....(maybe April 2007) succeeded, would all investors who bought into the PIF post that date be paid out in full?
If this is so, what if they had sold their shares? That would be a double whammy to the PIFinvestors left behind, because the new share-holder would be entitled to their $1/unit, if it ever gets to there, and the original investor would also get paid out!
Scary stuff....or am I wrong here? What is their chance of succeeding here; I know Jenny is defending it vigorously, BUT!!
Re: Octaviar MFS Premium Income Fund PIF
As there is now so much criticism of Wellington's supposed fees, it is interesting that you have omitted to mention that their estimate for "other management costs" is just .32%. This is inclusive of GST and is for the TOTAL other costs for managing the Fund.
Admittedly this is an estimate, but one could assume that if this is exceeded substantially it would be grounds for dismissing the RE without the 2% compensation.
When you compare this with the fees you have quoted above, a total of just 1.02% p.a. paid monthly and based on the value of the fund for the prior month seems extremely reasonable to me. This is particularly so when you take into account the antagonism which is forthcoming from a section of unit holders and resulting extra expense .
"...............source Explanatory Memorandum section 7.1
As there is now so much criticism of Wellington's supposed fees, it is interesting that you have omitted to mention that their estimate for "other management costs" is just .32%. This is inclusive of GST and is for the TOTAL other costs for managing the Fund.
Admittedly this is an estimate, but one could assume that if this is exceeded substantially it would be grounds for dismissing the RE without the 2% compensation.
When you compare this with the fees you have quoted above, a total of just 1.02% p.a. paid monthly and based on the value of the fund for the prior month seems extremely reasonable to me. This is particularly so when you take into account the antagonism which is forthcoming from a section of unit holders and resulting extra expense .
"...............source Explanatory Memorandum section 7.1
Re: Octaviar MFS Premium Income Fund PIF
Hi Mary,
Are you referring to the Bond Street Custodians case ? If so can you please share with us what information or details of this case that you have been given and also the source of your information.
Hi Mary,
Are you referring to the Bond Street Custodians case ? If so can you please share with us what information or details of this case that you have been given and also the source of your information.
Re: Octaviar MFS Premium Income Fund PIF
John
As mentioned the average Administration and Financial Advisor costs of Fund Managers are about 1.3%
I suspect the expense figure of 0.3% is low at the moment because the freeze on the funds distributions.
This means financial advisors are probably not being paid any commissions
If JH can keep these bloodsucking leaches out of the picture it would be great
However I do not think that is going to happen.
Also I believe she outsourced the bond portfolio and its difficult to know how she has estimated costs in this regard.
I would be very surprised if WC can maintain expenses at the level of 0.3% over time.
Nonetheless nobody would be happier than myself if it can be done .
John
As mentioned the average Administration and Financial Advisor costs of Fund Managers are about 1.3%
I suspect the expense figure of 0.3% is low at the moment because the freeze on the funds distributions.
This means financial advisors are probably not being paid any commissions
If JH can keep these bloodsucking leaches out of the picture it would be great
However I do not think that is going to happen.
Also I believe she outsourced the bond portfolio and its difficult to know how she has estimated costs in this regard.
I would be very surprised if WC can maintain expenses at the level of 0.3% over time.
Nonetheless nobody would be happier than myself if it can be done .
Re: Octaviar MFS Premium Income Fund PIF
Hi John,
You're right, WC did give an estimated figure of 0.32% of gross value of the assets of the Fund for the ongoing costs of managing the Fund.
They stated in the EM that "as at May 31 2008, the value of the assets of the Fund was $413mil. Based on this amount, the RE forecasts the total other costs for managing the Fund to be $1.32mil. Included in this amount are accounting, audit, custodian & compliance committee costs."
In 2006 the management costs of the Fund (excluding finance costs) were $2.2mil. As at June 2006, the gross assets of the Fund (as per Balance Sheet) were valued at $886.7mil. Therefore, management costs were 0.25%
In 2007 the management costs of the Fund (excluding finance costs) were$7.7mil. (there was a huge increase in fees & commissions). As at June 2007, the gross assets of the Fund (as per Balance Sheet) were valued at $395.7mil. Therefore, management costs were 1.95%.
What will the valuation of gross assets of the Fund be at June 2009 ? In regards to the management costs, commissions will obviously be down, but custodian, registry, accounting, auditing, insurance costs should remain pretty much the same as 2007. Legal fees will certainly be higher.
WC's estimates and forecasts are way out of the ball park !
Interesting to note your comments re: grounds for dismissing RE without the 2% fee.
Hi John,
You're right, WC did give an estimated figure of 0.32% of gross value of the assets of the Fund for the ongoing costs of managing the Fund.
They stated in the EM that "as at May 31 2008, the value of the assets of the Fund was $413mil. Based on this amount, the RE forecasts the total other costs for managing the Fund to be $1.32mil. Included in this amount are accounting, audit, custodian & compliance committee costs."
In 2006 the management costs of the Fund (excluding finance costs) were $2.2mil. As at June 2006, the gross assets of the Fund (as per Balance Sheet) were valued at $886.7mil. Therefore, management costs were 0.25%
In 2007 the management costs of the Fund (excluding finance costs) were$7.7mil. (there was a huge increase in fees & commissions). As at June 2007, the gross assets of the Fund (as per Balance Sheet) were valued at $395.7mil. Therefore, management costs were 1.95%.
What will the valuation of gross assets of the Fund be at June 2009 ? In regards to the management costs, commissions will obviously be down, but custodian, registry, accounting, auditing, insurance costs should remain pretty much the same as 2007. Legal fees will certainly be higher.
WC's estimates and forecasts are way out of the ball park !
Interesting to note your comments re: grounds for dismissing RE without the 2% fee.
Re: Octaviar MFS Premium Income Fund PIF
............ I think you are a year out........ surely that should be 2007 and 2008 - not 2006 and 2007 ----------- and although you mention "a huge increase in fees" you don't mention a huge decrease in RE's fees!
............ I think you are a year out........ surely that should be 2007 and 2008 - not 2006 and 2007 ----------- and although you mention "a huge increase in fees" you don't mention a huge decrease in RE's fees!
Re: Octaviar MFS Premium Income Fund PIF
Thank you for the correction JohnH, you're quite right I am a year out (I've lost a year somewhere ! LOL).
However, I have not mentioned RE fees and these fees have not been taken into account in my calculations, as the RE fees bear no relevance to "other management costs" - this is what your post was referring to.
Also the decrease in fees is due to the fact that during these years, RE fees were performance based.
Getting back to the point - in 2008 "other management costs" were 2.2%. For WC to forecast 2009 "other management" would be 0.32% is very hard to believe !
Thank you for the correction JohnH, you're quite right I am a year out (I've lost a year somewhere ! LOL).
However, I have not mentioned RE fees and these fees have not been taken into account in my calculations, as the RE fees bear no relevance to "other management costs" - this is what your post was referring to.
Also the decrease in fees is due to the fact that during these years, RE fees were performance based.
Getting back to the point - in 2008 "other management costs" were 2.2%. For WC to forecast 2009 "other management" would be 0.32% is very hard to believe !
Re: Octaviar MFS Premium Income Fund PIF
Well, as Jadel says let's hope that they are correct!
Well, as Jadel says let's hope that they are correct!
Re: Octaviar MFS Premium Income Fund PIF
Hi John, thanks again for your reply.
I just cannot subscribe to the "cross your fingers & hope" method of financial analysis and financial management.
In my opinion, it is crucial that financial management, analysis and planning should be based on factual information, and after looking at facts, it is too hard to believe that WC's forecasts and plans are achievable.
Hi John, thanks again for your reply.
I just cannot subscribe to the "cross your fingers & hope" method of financial analysis and financial management.
In my opinion, it is crucial that financial management, analysis and planning should be based on factual information, and after looking at facts, it is too hard to believe that WC's forecasts and plans are achievable.
Re: Octaviar MFS Premium Income Fund PIF
But also looking at the alternatives, or more importantly the lack of tangible alternatives, - better the devil we are about to know than the devil we don't.
But also looking at the alternatives, or more importantly the lack of tangible alternatives, - better the devil we are about to know than the devil we don't.
- Joined
- 30 May 2008
- Posts
- 328
- Reactions
- 0
Re: Octaviar MFS Premium Income Fund PIF
I agree $1.32 mill on expenses is not likely considering $3 mill was put aside for a 4 month period which only covered some costs.
Looks like WC won’t have to pay anything for purchasing the PIF!
The 9 May 2008 Investor Update says:
I agree $1.32 mill on expenses is not likely considering $3 mill was put aside for a 4 month period which only covered some costs.
On another topic
Looks like WC won’t have to pay anything for purchasing the PIF!
The 9 May 2008 Investor Update says:
The explanatory memorandum says:
The judge asked WC on Sept 17 why they wanted to retire WIM and WC said the only reason they would give is to simplify operating arrangements within the Wellington group. Perhaps it slipped their mind that they could be saving millions of dollars by ensuring WIM didn’t make a profit or even exist by the end of the financial year.
Re: Octaviar MFS Premium Income Fund PIF
Hi JohnH,
Hate to disagree again (& I hope you see this as a discussion rather than an argument, as I am sure we are both after the same outcome), but I believe the "devil we don't know" would be an independent RE or Administrator - and of course this was not an alternative presented by WC.
That is, a company that has no ties or relationship with MFS/Octaviar, McLaughlans Solicitors, McCullough Robertson Lawyers, or any Financial Advisor companies (I attended the first WC forum on GC where Paul Manka was a part of the team that stood up to give a speech).
A truely independant entity that Unit Holders can feel confident in, in believing that the management of the PIF will be conducted in the best interests of Unit Holders (no one else). I'm sure that the fees charged by an Administrator over 3 - 5 years would be comparible (possibly less), that what we're looking at now. On top of this, an Administrator would not have listed the Fund and people who are now experiencing extreme financial hardships would be able to redeem part of their investments under the new ASIC rules.
Comments are still being made about the lack of alternatives, the alternatives were always there, it is up to Unit Holders to agree to want to pursue them and accept them.
Hope this makes sense.
Hi JohnH,
Hate to disagree again (& I hope you see this as a discussion rather than an argument, as I am sure we are both after the same outcome), but I believe the "devil we don't know" would be an independent RE or Administrator - and of course this was not an alternative presented by WC.
That is, a company that has no ties or relationship with MFS/Octaviar, McLaughlans Solicitors, McCullough Robertson Lawyers, or any Financial Advisor companies (I attended the first WC forum on GC where Paul Manka was a part of the team that stood up to give a speech).
A truely independant entity that Unit Holders can feel confident in, in believing that the management of the PIF will be conducted in the best interests of Unit Holders (no one else). I'm sure that the fees charged by an Administrator over 3 - 5 years would be comparible (possibly less), that what we're looking at now. On top of this, an Administrator would not have listed the Fund and people who are now experiencing extreme financial hardships would be able to redeem part of their investments under the new ASIC rules.
Comments are still being made about the lack of alternatives, the alternatives were always there, it is up to Unit Holders to agree to want to pursue them and accept them.
Hope this makes sense.
Re: Octaviar MFS Premium Income Fund PIF
But the point is Burnt nobody came forward with a tangible alternative - I mean a name that could have been elected rather than "airy fairy" this is an alternative. I also went to the first PIFI meeting in Mudgeeraba, and all three meetings at the Convention Centre. There were things I didn't agree to (I voted no on item 3). However, now that JH has been voted in, I believe we should give her and her team a chance to perform, rather than continual knocking.
I accept that her communications could be a hell of a lot better, but I also accept that if expected funds do not come in on the expected date, then it is prudent to postpone (and I do believe it is postpone) payments until cash flow permits.
But the point is Burnt nobody came forward with a tangible alternative - I mean a name that could have been elected rather than "airy fairy" this is an alternative. I also went to the first PIFI meeting in Mudgeeraba, and all three meetings at the Convention Centre. There were things I didn't agree to (I voted no on item 3). However, now that JH has been voted in, I believe we should give her and her team a chance to perform, rather than continual knocking.
I accept that her communications could be a hell of a lot better, but I also accept that if expected funds do not come in on the expected date, then it is prudent to postpone (and I do believe it is postpone) payments until cash flow permits.
