Save on managed funds with TrailCap
Switch in minutes, save on managed funds year after year

If you have managed fund investments, then you're likely to be paying a commission to your adviser or broker, even if you haven't spoken to them in years. And you'd be paying them not just once, but year after year.

Called a trailing commission or trail, this annual management fee is paid by the fund manager to your adviser. Depending on the fund you choose and the size of your investment, this trail can add up to thousands of dollars every year.

If you invested in a managed fund through a financial adviser, they receive the trail. If you invested through an online broker like CommSec Direct Funds, then they keep the trail.

But at InvestSMART, we share the trail with you.

Who can save with TrailCap?

Managed funds held with the following managers may be eligible for the benefits of TrailCap.

  • Advance Asset Management Limited
  • AMP Capital Investors Limited
  • AMP Life Limited
  • Australian Unity Funds Management Ltd
  • AXA-National Mutual Funds Management Ltd
  • BlackRock Investment Mgmt (AUS) Ltd
  • BT Funds Management Ltd
  • Colonial First State Investments Limited
  • Fidante Partners Limited
  • Hunter Hall Investment Management Ltd
  • Macquarie Investment Management Limited
  • Man Investments Australia Ltd
  • MLC Investments Limited
  • MLC Limited
  • OnePath Funds Management Limited
  • Perpetual Investment Management Ltd

The TrailCap program is only applicable to those funds managed by the participating fund managers listed above. It does not apply to any wholesale managed funds, or managed funds which do not pay InvestSMART a trailing commission.

How we help you save on managed funds

At InvestSMART, our upfront trail is capped at $300 a year. For every dollar in trailing commissions we receive after that, we give 50 cents back to you as an annual payment.

That can make a big difference over time — especially if you and your family have more than one managed fund investment. Here's an example of how a couple with a super fund could save with InvestSMART's TrailCap:

Investor Managed fund investment Fund manager Annual trailing commission
Daniel $20,000 BT Funds Management $100
$17,500 Colonial First State $87.50
$35,000 Perpetual $175
Kate $30,000 MLC $150
$25,000 AXA $125
Daniel and Kate's super fund $160,000 AMP $800
Total trailing commissions $1,437.50
Less $300 cap $1,137.50
Annual savings $568.75
This is a hypothetical example based on the experiences of real InvestSMART clients. It does not represent any particular individual.

How do you know if you're paying a trailing commission?

Before June 2012, most fund managers paid a trail commission to financial planners. To find out whether your managed fund is paying a trail, you'll need to review the Product Disclosure Statement (PDS) you received when you first invested in the managed fund. The adviser trail commission is usually listed in the ‘Fees & charges' section and can be anywhere up to 0.6% of your total investment.

If you can't track down a copy of the PDS, call the fund manager and ask them whether a trail applies.

How do recent government reforms affect TrailCap?

Recently, the federal government introduced a package of reforms known as the Future of Financial Advice — FoFA for short. Among other things, the package bans trailing fees and other commissions for new investments in retail investment products from 1 July 2013. That's good news for investors!

Unfortunately, the reforms don't cover existing investments — so even after 1 July 2013, you could find yourself paying hidden commissions on managed funds. That means TrailCap can still save you money.

Switch and save

It only takes minutes to switch your existing managed funds to InvestSMART, but you can enjoy the savings year after year:

  1. Fill in our fast online form.
  2. Print the form, then sign it and send it by:

    Email

    admin@investsmart.com.au

    Fax

    1300 880 260

    Mail

    InvestSMART Financial Services Pty Limited
    Reply Paid 4477
    Sydney NSW 2001
  3. You'll start saving straight away. And once every year, on the anniversary of when you switched to InvestSMART, you'll receive your trail commission rebate, either as a cheque or via electronic fund transfer (EFT).
  4. To receive your TrailCap payments via electronic fund transfer (EFT) to an Australian bank account — just complete the EFT section in the online application form.
    If you have already nominated InvestSMART as your fund broker and have been receiving TrailCap cheques from us but would rather your money is deposited directly into your bank account, you can let us know your EFT details in the InvestSMART EFT payments form.

Other ways we help you save