What features to compare?
A good way to understand any super fund is to look at it as a collection of features centered around investments, insurance and account access. To compare any super fund is to look at its investment choices, their investment return track records, fees, insurance packages and other features like their online account access, availability of good quality financial advice through the fund and whether it offers other financial products like banking, loans, credit cards or savings plans.
Comparing investment options may seem daunting but all is needed is to check whether the investment returns from the main options are above or below average over the medium term, say three, five or 10 years. A member should also look at the total fees a fund charges noting that anything above 1.3% is now considered highly priced. Also the types of insurance packages being offered and what they cost is another feature to compare with other super funds.
Good super funds and products are also transparent and open about how they invest their money, which means they provide clear information describing the investment managers they use and what underlying shares and debt securities they invest in - this last aspect is called portfolio holdings disclosure. If a member wants their superannuation invested into things like renewable energy this is especially important for a member to know upfront.
other questions to ask are:
- Can I choose indexed investments,
- Can I choose ethically managed investments,
- Can I choose an aged-based lifestage strategy
Several super funds also provide discounted access to health insurance so that's another feature to consider.
This technical resource is intended for the use of financial advisers only. It is current as at the date of publication but may be subject to change. This publication has been prepared without taking into account a potential investor's objectives, financial situation, needs or objectives. Before making a recommendation based on this material, you should consider its appropriateness based on the client's objectives, financial situation and needs. Rainmaker Group is not a registered tax agent under the Tax Agent Services Act 2009. Your client should refer to a registered tax agent before relying on information published herein that may impact their tax obligations, liabilities or entitlements.
Last modified: Friday, November 13, 2020