The best and worst super funds

AUSTRALIANS could be costing themselves tens of thousands of dollars of savings – the equivalent of multiple round-the-world trips – in retirement by signing up to the wrong super fund.

Many bank-owned super funds were given a hiding in the recent financial services Royal Commission for failing to do the right thing by customers.

This included charging members high fees, giving conflicted financial advice and consistently delivering poor returns.

New analysis by roboadviser Stockspot, in its latest Fat Cat Funds Report, looked at hundreds of super funds, including their fees and performance over the past five years.

It found a 30-year-old male could end up with $544,000 if they retired at 67 and invested their money in some of the best balanced super funds.

This compared with $470,000 at retirement if they invested with some of the worst funds, with higher fees and poor returns.

According to Stockspot’s methodology, a balanced super fund typically invests 40 to 60 per cent in shares and property.

Stockspot found that for balanced funds, the top 10 had average fees of 1.05 per cent and returns of 7.75 per cent over the past five years.

The worst funds had average fees of 1.47 per cent and returns of 4.86 per cent.

Stockspot chief executive officer Chris Brycki said it was vital Australians looked at their super fees to ensure they were not paying too much.

“Go to the website of your fund and make sure you are being charged a low fee,” Mr Brycki said.

“Make sure you are in a fund that has enough growth assets, because that’s one way you can also miss out on returns.”

He said often the fees outlined on super fund statements did not include all the charges that hit members, sopeople should ring their fund and ask exactly what they were paying for.

Australian Institute of Superannuation Trustees chief executive officer Eva Scheerlinck issued a warning over the dangers of being in the wrong fund.

“The impact of high fees or poor investment performance on your retirement outcome should not be underestimated,” she said.

“All Australians need to carefully examine their super and consider the long-term benefits of investing in a good-value, high-performing, not-for-profit MySuper fund.”