Switch to su­per sav­ings

With su­per caught up in the bank­ing in­quiry, the time’s right to look at your own fund, writes So­phie Elsworth

The Chronicle - - Money -

SU­PER­AN­NU­A­TION funds have come un­der fire in week one of the bank­ing royal com­mis­sion and there’s more pain to come in week two.

For frus­trated mem­bers who have been out­raged with the tales of rorts, bla­tant goug­ing and the col­lec­tion of lu­cra­tive com­mis­sions, it may be time to switch. But be­fore you jump, ex­perts warn there are a few things to con­sider.


The su­per­an­nu­a­tion in­dus­try is worth a whop­ping $2.6 bil­lion, and with dozens of funds avail­able there’s plenty of choice for mem­bers.

The As­so­ci­a­tion of Su­per­an­nu­a­tion Funds of Aus­tralia’s chief ex­ec­u­tive of­fi­cer, Martin Fahy, said the first step was to check the sta­tus of your ex­ist­ing fund, in­clud­ing fees, charges and bal­ance, be­fore tak­ing any ac­tion.

“Peo­ple need to be more en­gaged with their su­per and if you’ve got con­cerns with your su­per, get out your state­ments and fund let­ters,’’ he said.

Also pay at­ten­tion to what in­vest­ment op­tion you are in be­cause this will sig­nif­i­cantly im­pact your re­turns.


Dr Fahy sug­gests mem­bers ask friends and fam­ily what fees and charges they pay so you can com­pare with your own.

“Com­pare your fees and then ring your fund,’’ he said. “If you feel you are not get­ting a good deal then don’t be afraid to move.”

He said fees could range up to 3 per cent but ideally cus­tomers should be pay­ing around 1 to 2 per cent.

“For most con­sumers, fees will range from 0.5 per cent to 1.5 per cent dependent on prod­uct fea­tures such as the na­ture of un­der­ly­ing in­vest­ments,’’ Dr Fahy said. “On av­er­age, the per­cent­age-based fee for con­sumers in MySu­per prod­ucts is 0.81 per cent per an­num.”

There are many dif­fer­ent fees that ap­ply, in­clud­ing ad­min­is­tra­tion and in­vest­ment fees and in­sur­ance costs, so if you’re con­fused, call your fund.


One of the na­tion’s largest su­per funds, Host­plus, has more than 1.1 mil­lion mem­bers and man­ages $34 bil­lion. The fund’s group ex­ec­u­tive of re­tire­ment so­lu­tions and ad­vice, Paul Wat­son, said it was im­por­tant to also weigh up how your fund had per­formed in re­cent years.

“Gen­eral con­sid­er­a­tions in­clude the long-term net per­for­mance of an in­vest­ment op­tion,’’ he said. “Stay­ing with one top-per­form­ing fund over the long-term could mean the dif­fer­ence in tens of thou­sands of dol­lars.”

The fund re­cently re­turned the best of all “My Su­per” bal­anced in­vest­ment op­tions for the last fi­nan­cial year, at 12.5 per cent. But in­dus­try ex­perts say 10-year per­for­mance is of­ten a bet­ter in­di­ca­tor of how a fund has re­ally fared.


There are plenty of on­line sites, in­clud­ing Canstar, Chant West, Su­per Rat­ings, Morn­ingstar and RateCity, to com­pare funds.

Mr Wat­son said it can be a rel­a­tively smooth process. “Set­ting up a new su­per ac­count and con­sol­i­dat­ing your other ac­counts can be done over a cup of cof­fee and could be the most valu­able 10 min­utes of your life,’’ he said.

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