1. The new fee and cost disclosure requirements
About RG 97
The new fee and cost disclosure requirements
A presentation to
Client Name
Date
Presented by
Firstname Surname
Jobtitle/Position
September 2017

2. Summary
There are new industry-wide regulatory fee and cost disclosure requirements.1
The changes aim to help clients compare fees and costs of different super, pension and managed investment products.
Product Disclosure Statements (PDSs) now include more information to explain the costs of investing.
From 1 December, customers’ statements will also reflect the changes.
There’s no impact on clients’ investment performance after fees and costs.
There’ll be some changes to the amounts and types of fees and costs stated in PDSs and client statements.
However, there are no new fees or costs being charged, so clients won’t pay any more.
The way MLC calculates investment performance hasn’t changed.
There’s an interim process for producing SoAs from 30 Sept to early Dec (see slide 11).
Later in this presentation, there are some examples of how our disclosure documents and online tools like the Fund Profile Tool will change to reflect the new disclosure requirements for fees and costs.
It’s important to understand that the disclosure requirements aren’t fee increases or imposing new fee. The fees and costs disclosed may be higher than what was previously disclosed, but the actual fees and costs clients pay won’t change.
There’s also no impact on after-fee performance. We still calculate performance in exactly the same way.
1The changes, introduced by ASIC, are summarised in updated Regulatory Guide 97 (‘RG97’). Note: ASIC continues to evolve their guidance for how fees and costs are to be disclosed. MLC supports ongoing changes to improve the comparability of super and investment products.

3. What are the disclosure changes?
There are some changes to the types and amounts of fees stated in PDSs and customer statements.
The key change is an expansion in the definition of indirect costs.
These are generally costs incurred in underlying investment vehicles where a fund or investment option invests in private equity, unlisted property or hedge funds, or where a derivative strategy is used.
This means deeper ‘look through’ into investment structures to identify all the costs for underlying investments.
As a result, the indirect cost ratio disclosed for super products will generally increase and management costs for managed investment schemes will also increase where indirect costs are incurred.

4. What are the disclosure changes? cont
Additional information and amounts will be disclosed for other costs of investing, including:
transaction costs of buying and selling assets,
borrowing costs such as loan establishment fees and interest payments, and
property operating costs such as rates, staff costs and utilities associated with property investments.

5. Sample MLC fee and cost disclosure changes
MLC MySuper fees and costs post RG97
Investment Fee
0.46% pa
ICR
0.23% pa
Total
0.69% pa
(0.55% pa pre RG97) + =
MLC Horizon 4 - MasterKey Super option post RG97
Investment Fee
0.70% pa
ICR
0.50% pa
Total
1.20% pa
(0.92% pa pre RG97) + =
MLC Horizon 4 Wholesale on MLC Wrap post RG97
Later in this presentation, there are some examples of how our disclosure documents and online tools like the Fund Profile Tool will change to reflect the new disclosure requirements for fees and costs.
It’s important to understand that the disclosure requirements aren’t fee increases or imposing new fee. The fees and costs disclosed may be higher than what was previously disclosed, but the actual fees and costs clients pay won’t change.
There’s also no impact on after-fee performance. We still calculate performance in exactly the same way.
Management Fee
0.70% pa
Indirect costs
0.08% pa
Total
0.78% pa
(0.70% pa pre RG97) + =

6. Performance calculation NO CHANGE to performance
There’s no impact on investment performance
Illustrative example for a super fund
Item
Performance calculation
Costs disclosed
Pre-RG97
Post RG97
One year investment performance before fees and costs
11.65% pa
Less Administration Fee
0.45 % pa
Less Investment Fee
0.60% pa
Less Estimated Indirect Cost Ratio (ICR)
0.40% pa
0.15% pa
Less Estimated transaction costs
0.10%pa
Less Estimated borrowing costs
0.05% pa
Less Estimated property operating costs
One year investment performance after fees and costs
10.00% pa
These costs have always been deducted from unit prices when calculating investment performance.
NO CHANGE to performance
CHANGE to disclosure

7. What are the changes to super disclosure? Illustrative super PDS3
What are the changes to super disclosure? Illustrative super PDS
PDS Disclosure
Pre-RG97
Post RG97
RG97 Change Summary
Investment Fee
0.60% pa
There is an expanded definition of “indirect costs”. Indirect costs must be included in the Investment Fee unless the trustee has elected to disclose them in the ICR (as is the case in this illustration).
The indirect costs definition now explicitly covers:
Underlying costs - costs incurred in underlying investment vehicles that are not paid directly out of the super fund. These costs are generally incurred where a fund or investment option invests in private equity, unlisted property or hedge funds.
Derivative strategy costs - certain amounts incurred where derivative strategies are used which aim to protect a client's money from market movements such as changes in exchange rates must also be disclosed.
Estimated Indirect Cost Ratio (ICR)
0.15% pa
Some underlying costs were not required to be disclosed in the PDS
0.40% pa
Administration Fee
0.45% pa
Generally no RG97 change. Some funds may have been disclosing this fee net of tax and may now disclose a higher gross of tax amount.
Buy / Sell Spread
0.10%
Generally no RG97 change.
Switching Fee
NIL
Exit Fee
Advice Fees
Other Fees and Costs – disclosed in the Additional Explanation of Fees and Costs section of the PDS
Transaction and Operational Costs
Amounts may not have been previously disclosed in the PDS
0.10% pa
Total gross transaction and operational costs (such as brokerage and stamp duty) incurred in the previous financial year must now be disclosed.
Borrowing Costs
0.05% pa
Total borrowing costs (such as loan establishment fees and interest payments) incurred in the previous financial year must now be disclosed.
Property Operating Costs
Total property operating costs (such as rates, staff costs and utilities) associated with property investments that are incurred in the previous financial year must now be disclosed.

8. Amounts may not have been previously reported in the PDS
What are the changes to disclosure for managed investment schemes? Illustrative managed investment scheme PDS 5
PDS Disclosure
Pre-RG97
Post RG97
RG97 Change Summary
Fees when your money moves in or out of the managed investment product.
Establishment Fee
NIL
Generally no RG97 change.
Contribution Fee
Withdrawal Fee
Exit Fee
Management Costs
The fees and costs of managing you investment
0.70 % pa
Some underlying (indirect) costs were not required to be disclosed in the PDS
0.80% pa
Issuers may provide a different level of breakdown of their management costs which may include:
Management fees
Expense recoveries
Indirect costs - these are now part of management costs and are generally the fees and costs of underlying funds, including performance related costs.
OTC derivative costs
Performance fees (an estimate of the ongoing performance fees is also required in the Additional Explanation of Fees and Costs section of the PDS).
Other Fees and Costs – disclosed in the Additional Explanation of Fees and Costs section of the PDS
Transaction, Operational and Borrowing Costs
Amounts may not have been previously reported in the PDS
0.15% pa
Total gross transaction and operational costs (such as brokerage and stamp duty) and total borrowing costs (such as loan establishment fees and interest payments) incurred in the previous financial year must now be disclosed.
Buy/Sell spreads will continue to be disclosed and generally there will be no RG97 change. Spreads may change as part of usual business practice.
RG97 - The new fee and cost disclosure requirements

9. Sample Investment Menu for MLC super products
For our super and pension products, fees and costs information is disclosed in the 8 page PDS and the Fee Brochure. Amounts for each option are in the Investment Menu.
There are no changes to MLC Investment fees.
Certain transaction costs that involve an actual payment (such as brokerage) are included in the ICR. The amount in the ICR is net of any amount recovered by a buy/sell spread.
A breakdown of indirect costs is shown to highlight amounts paid for performance.
Transaction costs that are not recovered by a buy/sell spread or included in the ICR are disclosed here.
Later in this presentation, there are some examples of how our disclosure documents and online tools like the Fund Profile Tool will change to reflect the new disclosure requirements for fees and costs.
It’s important to understand that the disclosure requirements aren’t fee increases or imposing new fee. The fees and costs disclosed may be higher than what was previously disclosed, but the actual fees and costs clients pay won’t change.
There’s also no impact on after-fee performance. We still calculate performance in exactly the same way.

10. Sample PDS for MLC Wholesale products
Fees and costs are set out in the PDS Fee and Cost Table. This is the Fee and Cost Table for MLC Wholesale Horizon 4.
Indirect costs must be disclosed as part of Management costs, so total Management costs will generally be higher. This will flow through to SOAs and Customer Statements.
A breakdown of indirect costs is shown to highlight amounts paid for performance. Most MLC funds will disclose performance amounts as costs.
Later in this presentation, there are some examples of how our disclosure documents and online tools like the Fund Profile Tool will change to reflect the new disclosure requirements for fees and costs.
It’s important to understand that the disclosure requirements aren’t fee increases or imposing new fee. The fees and costs disclosed may be higher than what was previously disclosed, but the actual fees and costs clients pay won’t change.
There’s also no impact on after-fee performance. We still calculate performance in exactly the same way.
In addition, other items including transaction and borrowing costs will be included in the Additional explanation of fees and costs section of the PDS.

11. Interim process for producing SoAs and RoAs
From 30 September 2017 to early December 2017, data providers will flow the new Indirect Cost Ratios (ICRs) into financial planning software such as XPLAN.
Aggregated fee and cost data won’t be available during this interim period.
To ensure advisers provide compliant advice, they must follow the interim XPLAN process until they are notified that this period is over.
It’s expected to be back to business as usual the beginning of December
Resources to help advisers with the interim process are on the ‘Resources’ page of Adviser Online.

12. More information RG 97 adviser site: mlc.com.au/rg97 FAQ
Resources to support client conversations about:
what the RG 97 changes are
how MLC invests
the value of our investment management approach, and
the benefits of using investment strategies that incur indirect costs.
On ‘Resources’ tab of Adviser Online
Additional resources to help with interim process for producing SoAs:
recorded webinar: RG 97 and XPLAN interim process overview 
webinar presentation slide pack
XPLAN interim process guide, and
Portfolio Fee Calculator for XPLAN

13. Important information
This information is provided by:
MLC Investments Limited (ABN , AFSL ), Responsible Entity and Issuer of the MLC Wholesale Horizon Funds (MLC) and
NULIS Nominees (Australia) Limited (ABN , AFSL ), Trustee and Issuer of the MLC Super Fund (ABN: ) (NULIS).
MLC and NULIS are members of the National Australia Bank Limited (ABN , AFSL ) (NAB) group of companies (NAB Group). NAB does not guarantee or otherwise accept any liability in respect of any financial product referred to in this presentation. MLC and NULIS may use the services of NAB Group companies where it makes good business sense to do so and will benefit customers.
This information is directed to and prepared for Australian residents only.
This information may constitute general advice. It has been prepared without taking account of an investor’s objectives, financial situation or needs and because of that an investor should, before acting on the advice, consider the appropriateness of the advice having regard to their personal objectives, financial situation and needs.
You should obtain a Product Disclosure Statement (PDS) relating to the financial product/s mentioned in this communication issued by MLC or NULIS and consider it before making any decision about whether to acquire or continue to hold these products. A copy of the PDS is available upon request by phoning the MLC call centre on or on our website at mlc.com.au or mlcinvestmenttrust.com.au.

14. Thank you
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