I'm not going to go into a long-winded explanation and this isn't a 'justification' of anything or anyone, but a snapshot of history as I see it.
Firstly, ejd, perhaps some explanation about exactly who was getting the 1% and why. I doubt it was a trailing commission. Were you changing to another fund completely or just another investment option in that same fund. The difference in cash rate is probably (but not always - depends on which actual fund) deduction of an admin fee to operate the super fund, just like it costs you to run your super fund and just like the bank doesn't pay you the same they get for lending your TD money out to someone else. What did the fund say when you asked?
Jason, depending on when your fund commenced, you have probably been (or should have been) informed of the trailing comms at some time, either when you received some advice or initially. However, if your super is over maybe 10 years old, then the obligation to disclose wasn't as high back then unfortunately and this is why disclosure requirements changed some years ago.
The historical thing is that trails were originally paid from the 'manufacturer' (the super fund) to the 'retailer' (adviser, or more commonly in the past - just a salesperson) of these products as probably there was no or minimal upfront payment by you to the 'retailer', which you probably would have baulked at. So the costs of providing the 'product' to you, rightly or wrongly, big or small, are on a 'drip feed' system that is actually not linked to whether or not, or as payment (in part or full) for ongoing advice, despite what the current government is saying.
Move forward to 2011 and the majority of new super funds that are 'advised' these days are cheaper, don't have trailing commissions but agreed fees and have a much bigger range of options and features. They still cost money to administer, run and be advised on but the older super funds with trailing comms are dying out . The exception seems to be Industry Funds that manage to find (as I understand about many millions of) $$ to look after the interests of the advertising sector and the ALP. If you don't think their 'advisers' aren't subsidised (i.e. fees don't cover their costs = commission form the product) or will tell you NOT to stay in an IF or that a SMSF is a really good idea....
Anyway, me message is, as always, DYOR, ask questions, find out the alternatives - SMSF or not, understand that everything has a cost either you do the work or pay someone else, and if you get 'advice' understand their motivations and also try and understand the red-tape they may be up against in trying to help you. It ain't pretty, apparently
Sorry to have hijacked this thread a bit. Now for the onslaught of stories about 'a friend of mine paid blah blah...'
