The ICR fee measure is prescribed by the Corporations Act and effectively replaces the industry standards on fee measures (see OGFMs & MERs below) for the year ended 30 June 2005 (for superannuation products) & 30 June 2006 (for managed funds), although early adoption is permitted and encouraged.
The ICR is a measure of the 'indirect' management costs of investing in the fund, being those borne by all members on a proportional basis.
The ICR excludes management costs deducted directly from your account as well other discrete fees or costs that are borne directly by you, such as;
- fees you pay to your financial adviser
- contribution fees,
- additional service fees, or
- switching and withdrawal fees.
The ICR is very similar to the OGFM and MER and largely enshrined in law what had been the industry standard in calculating fee measures.
This industry standard was replaced by the ICR for 2004/2005 & later financial years.
The OGFM is very similar to the MER, but was broader in its application (applying to wraps and master funds) and included administration and investment fees relevant to those products, and assumed an account balance of either $50,000 or $500,000, depending on the fund.
This industry standard was replaced by the OGFM for the 2003/2004 financial year.
Broadly, the MER assessed the fees and expenses of the fund as a proportion of the fund's net asset value. Its aim is to disclose the extra costs of investing in a fund (ie it doesn’t include those expenses which would be incurred by a direct investor in the same assets, eg brokerage).
The MER excludes contribution and withdrawal fees.