The fees between a return and a balance
Moneysmart lists the fees a managed fund commonly charges, and adds that a fund can also take costs out of its returns, such as transaction costs and borrowing costs.
| Fee | What it is charged for |
|---|---|
| Management fees and costs | Running the fund, year in, year out |
| Performance fee | Can be charged when the fund beats its benchmark |
The other common fees, such as those for opening an investment or adding money to it, are on Moneysmart’s Choosing a managed fund page.
Super has the same shape. In its list of things to compare between super funds, Moneysmart says fees reduce an account balance over time, and points to administration fees, investment fees, any other fees, and how often each is charged.
The sum the law puts in a disclosure statement
A Product Disclosure Statement (PDS) for a super product or a managed investment product usually opens its fees section with a “Consumer advisory warning”. Its words are set by regulation, and ASIC’s Regulatory Guide 97 reproduces them and says they must not be changed or added to. The warning begins:
“Small differences in both investment performance and fees and costs can have a substantial impact on your long-term returns.
For example, total annual fees and costs of 2% of your account balance rather than 1% could reduce your final return by up to 20% over a 30-year period (for example, reduce it from $100,000 to $80,000).”
Consumer advisory warning, as reproduced in ASIC Regulatory Guide 97, Figure 1
Figures from the consumer advisory warning as RG 97 reproduces it.
One percentage point a year sounds small beside a return. Read as a sum, that point is taken every year, from a balance that is itself compounding, for thirty years (this guide’s reading). The warning goes on to ask the reader to weigh whether features such as better investment performance or better member services justify higher fees and costs, and it points to a Moneysmart calculator for seeing the effect of fees in a person’s own circumstances: the superannuation calculator in the super version, the managed funds fee calculator in the managed investment version.
The warning does not print the assumptions behind its example, and says “up to”: it is an illustration of scale, not a promise of any figure.
One saver’s sum, from Moneysmart
Moneysmart’s example member of a super fund is 30, earns $50,000 a year and has $20,000 in super, paying fees of 2.5%. She moves to a fund that charges 1% for the same level of performance, and Moneysmart puts her balance at 65 at $336,000 instead of $255,000.
Moneysmart’s figures; the subtraction is checked here.
The page does not set out the assumptions behind those two balances, so this guide can check the subtraction but not the projection. The same holds for any fee example: the difference it shows is only as sound as the assumptions underneath it.
What ASIC expects of an advertised return
ASIC’s guidance on advertising financial products, Regulatory Guide 234, was reissued on 9 June 2026. It says the effect that fees and costs may have on returns should be clearly stated in an advertisement, and gives examples:
- “returns should be net of fees and costs to the greatest extent practicable”
- “where the fee level is variable, the maximum fee should be deducted from the possible returns advertised”
- where some fees and costs cannot practically be deducted, “the existence of undeducted fees and costs should be prominently disclosed”, with their size where practicable
- where a product has more than one fee option, an advertisement should say which option a return relates to, and “not only show the option that shows the highest net returns”
- “where a scenario is given for a specific investment period, entry and exit fees should be deducted”
ASIC’s own example is a fund whose five-year net returns are 10% a year under an entry-fee option and 9.6% a year under a nil-entry-fee option. It lists three acceptable ways to quote them: give both; give only the lower; or give the lower and put the other in a footnote. None of the three puts the 10% up front on its own.
A figure from ASIC’s guide, not a real fundAnother of ASIC’s examples imagines an advertisement claiming that money “placed $10,000 in the fund in 2015” would be worth $740,000 today. ASIC says such a figure should be worked as if the investor bought at the start and sold at the end, deducting all relevant fees (entry, annual, exit and performance fees), on an entry price to exit price basis, and applying current fees.
What a fee calculator leaves out
Moneysmart’s managed funds fee calculator shows the effect of fees as the extra amount the investment could have held if no fees had been paid. Its stated assumptions are worth reading before its answer: returns are reinvested, earnings are shown before tax, the projection does not allow for inflation, and it makes no allowance for buy/sell spreads, performance fees, switching fees or termination fees, nor for brokerage.
Moneysmart also notes that passive funds, which try to match a market index rather than beat it, usually charge lower fees than actively managed funds, because there is less day-to-day decision-making. A fee is one line of the sum; Moneysmart’s comparison list for super sets fees beside performance, investment options, insurance and services.