I am unsure if you are aware that the famous online Unit Trust distributor Fundsupermart is imposing a platform fee in a month's time.
http://www.fundsupermart.com/
Many retail investors are very unhappy about this new fee to be implemented in such a short notice. In addition, we always try to keep our cost down but FSM, due to various reasons, go in different direction as its clients.
I have not receive any email or letter regarding this change in fee structure until a forumer alerted the rest.
JL
REPLY
Please ask Fundsupermart to show you where, in the contract, they have the legal right to impose such a fee. If you withdraw from this platform, are you able to keep your record directly with the unit trust or move the units to another platform? You can also ask the unit trust that you invested in.
UPDATE
Fundsupermart plans to levy a quarterly fee of 0.125% (0.5% p.a.) plus GST for equity funds. A lower charge applies for investments above $500,000. This is rather high, as the investor has to bear a management fee to the asset manager as well.
An investor told me that she plans to transfer her funds to Dollar Dex. There is no transfer charge. Dollar Dex indicated in their website that they do not plan to implement a platform fee. She said another option is to tranfer to POEMS.
I think imposing a platform fee may just drive investors to other platforms.
ReplyDeleteCharging 0.6% fees per annum for just holding on the the unit trust is pretty costly...add this to the management fee of the UT...really i think etf just makes better sense.
Yep... can check out the posts of some really pissed investors here:
ReplyDeletehttp://www.sgfunds.com/index/viewtopic.php?f=22&t=11080
https://secure.fundsupermart.com/main/community/forumPosts.svdo?pid=002161&page=1
https://secure.fundsupermart.com/main/community/forumPosts.svdo?pid=002156&page=1
Mr Tan, please correct your post. The wrap fee for equity fund is 0.50% + GST per year (i.e. 0.535%). Bond funds wrap fee are charged at 0.20% + GST per year (0.214%) and money market funds are also subjected to this "fixed income" wrap fee!
ReplyDeleteI came across these statements in fundsupermart.com's terms and conditions.
ReplyDeleteWonder if these conditions are legally binding.
"
2.2 iFAST reserves the right to add to, amend or vary any these terms and conditions at any time in its sole and absolute discretion and any additions, amendments or variations shall take effect and bind each Customer from such date as iFAST may prescribed provided that iFAST gives prior notice to the Customer. A Customer shall be deemed to have agreed to any addition, amendment and/or variation without reservation, whether or not the Customer gives iFAST any Orders subsequent to the said change in terms and conditions.
"
This seems to give them the right to change the contact any way they like, without seeking permission of the customer.
"12.4 iFAST shall be entitled to charge interest on any sum or payment due to iFAST from the Customer at such rate and calculated and/or compounded in such manner as iFAST may, in its sole and absolute discretion, impose and determine from time to time and to debit the Account in respect of the interest due.
"
This one seems to give them the right to charge you any interest rate they like, for any due payment.
Mr Tan,
ReplyDeleteThey also mentioned that this is the trend of Unit Trust investment in the future. Is it true that this trend has been ongoing in western country, like UK or US? I find it difficult to understand that with more money flow into Unit Trust, yet they predict that the cost will go higher.. What do you think about their article here: http://www.fundsupermart.com/main/research/viewHTML.tpl?articleNo=4023?
Well nobody likes to see increase in fees but how do you expect FSM to pay their own people? Costs of living is increasing and people's pay also have to increase.
ReplyDeleteIn my view, it is a fair deal. In fact, my hope is that they remain forever profitable and make money so that they can stay in the business for a long, long time.
If they keep their fees as what they were for the last few years, their staff will have same pay for the next few years and this is not keeping in line with inflation.
My view is that DollarDex and other platforms also review their fee structure and consider FSM model for their future fee increase.
Fundsupermart should look into reducing their expenses first. I receive 4 copies of their magazines for 4 members of my family. Nobody reads them. It must be very costly to produce and mail them.
ReplyDeleteChecked with FSM - The 0.2% Fixed-Income fund charge also applies to money market funds. This means if the money market fund returns 1% p.a., we lose 20% of our return!
ReplyDeleteMr Tan,
ReplyDeleteI joined Fundsupermart a while back because of your recommendation.
I really hope you could give some advice on how to transfer my funds to Dollar Dex or POEMS.
Thank you.
You just need to fill up a transfer form from DD or philip (poems). After the transfer is done (typically a month or two), check that the UNITS for each UT after the transfer = the UNITS before the transfer.
ReplyDeleteI think everyone is slightly disappointed with fsm. maybe it's just the way they handled the implementation...
Mr Tan - are you going to remain with fsm?
Anon 9:45PM,
ReplyDeleteYou should take charge of your own money & investments. Start by browsing DD website or Poems website for FAQ on transferring. It's not difficult, at most just a little bit troublesome.
You need to do 2 things first:
1. Open accounts at DD or POEMS or both. Prepare the info and do it next week. It's free and no obligation to put in any money.
2. Check to see if your current UTs are available on DD and/or POEMS. You cannot transfer those UTs which is not available in the receiving distributor. DD is capitalising on this situation and allowing transferors to free-switch to another UTs if their existing UTs is not found on DD. You can also simply do your own free-switch on FSM first before transferring out.
Once you have settled all the transferring, and familiarise with your new "home", you should also seriously start to familiarise with ETFs. Begin with SGX website -- they have plenty of info & links on the ETFs listed locally.
This way, you may even mix-and-match UTs with ETFs, and will be prepared if let's say the UT industry in future starts increasing costs for customers. Who knows? Once you start with ETFs you may find much more sense with the lower costs and forget about UTs altogether!
Fundsupermart receive a portion of the annual fee (expense ratio) from fund houses. That means the bigger the portfolio, the more FSM will earn. Now, this additional platform fee is pure greed from FSM!
ReplyDeleteDollarDEX is opening their welcoming arms to those who wish to transfer in - FOC. If they do not have the fund that you currently own, they are willing to waive the sales charges so that you can sell and but from them. Go check it out.
http://www.dollardex.com/SG/index.cfm?current=/contents/011004093003&contentID=4165
Hi Mr Tan,
I agreed. I receive multiple mazagine as well but hardly read it because most of the articles are sales talk by fund manager. Maybe it's a source of advertising income for FSM.
Reply to 9:45 pm
ReplyDeleteRead the posting by Wasserstein and transfer your funds to Poems or DollarDex.
Reply to Wasserstein
My family members will be moving their accounts to Poems. I find the platform fee of 0.5% p.a. by FundSupermart to be excessive, especially as they have a cut of the annual management fee from the funds.
It is a great disappointment that FSM decided to impose this fee. On the otherhand, FSM is running a business and not a charity. And so why not the new fee?
ReplyDeleteIf your fund is not available on DollarDex, and you don't want to sell (because you would be realising large losses), are you pretty much stuck with FSM?
ReplyDelete