Another annoying super fund post

• 

  rickb on 14/06/2014 - 20:17

  Good starting point. Click here -> http://www.canstar.com.au/superannuation/compare-starter/

• 

  csg001 on 15/06/2014 - 21:11

  Giving you specific advice on super fund choices is actually financial advice, so that would require the person giving you the advice to have an AFSL.

  However in terms of general advice, here are a few:

  • Combine your super into one single fund. 99% of industry and retail super funds would have option to "roll over" amounts from your other funds into them and most of them would be fully automated. ie you enter your other fund's details and they take care of the rest. This would save money as you are only paying fees on one account.

  • Write to your fund to request cancellation of the insurance. Insurance is set up by default when you open a super fund account, however you are not legally required to have insurance. It'd be prudent to have insurance, but only have this on your "main" super fund, the rest can be cancelled. Anyway you can only claim from one insurance policy so it makes no sense to have duplicate policies across multiple funds.

  • If you want low fees generally "industry funds" are better. However if you want flexibility of investment choice then "retail funds" are better. The banks normally offer "retail funds" option.

• 

  Baysew on 16/06/2014 - 11:36

  Have a look at ING Living Super

  This might be what you are looking for.

  • No fees on Cash and Balanced options (there a buy/sell spread on balanced option)
  • ING seem to be keen to transfer other funds, and have on line tools to help.
  • On line site is good. You are in control of the process.
  • With any change of job, you can nominate your own fund ie employer doesn't set one up for you with all the resulting unwanted insurance and unknown fees.

  The 4 corners episode was a real shocker. Remember financial planners are actually financial salesmen.
  Beware !

• 

  daffyd on 17/06/2014 - 12:12

  If you want to keep things simple, when you have a relatively low balance, it is hard to go past ING Living Super Balanced Option. At this stage the amount you contribute will make a bigger difference than a particular investment option.

  Once your balance grows past around the $20-30k mark, if your risk appetite and timeframe are reasonable, look at industry funds for a low-cost more aggressive index option. e.g. (my blog outlining low-cost funds; I receive no remuneration for it): http://superannuationfreak.blogspot.com.au/2013/07/the-best-…

  • 

    Drifta on 27/03/2015 - 20:41

    Hi daffyd,

    Thanks for that link. Its a great reference tool.

    Is it possible for you to create an updated version of it, but with more funds?

    I currently have accounts with rest super and kinetic super. I used the tool provided by https://www.chantwest.com.au/cwAC2Shell.aspx which is great to learn about the different companies comparing them.

    What is your opinion on benefits of rest comparing them to australian super and host plus?

    • 

      daffyd on 30/03/2015 - 18:43

      +2

      I have yet to find much in the way of compelling competition to Australian Super, HostPlus and ING when it comes to low-cost/index funds.

      Checking quickly, Rest have higher fees than the index choices I write about. If I recall Rest have performed consistently well. I have no way to know if that will continue but I also have no reason to believe that using a similar allocation from Rest vs. another provider would prove a particularly large mistake.

      • 

        Drifta on 30/03/2015 - 19:17

        Thanks for that. Yeah I have looked at the figures for both. Seems that Rest has great long term returns, however their recents ones are not as well. Kintetic Super has really good returns as of late, but they havent been around for longer than 5 years.

        I understand [ast performance isnt an idicator of future so for now sticking with current provider and monitor.

        Thanks for the blog and your help

    • 

      squeeb on 01/04/2015 - 20:22

      I am pretty sure that I read somewhere that Chant West quotes the investment returns before fees.

      Most other sites quote returns after fees.

      • 

        Drifta on 01/04/2015 - 20:34

        Anyone able to confirm this? Changes everything if this is the case :(

      • 

        squeeb on 01/04/2015 - 21:50

        +1

        @Drifta:

        Okay so I found the reference:

        https://www.moneysmart.gov.au/superannuation-and-retirement/…

        How they measure investment performance

        One company, Chant West, calculates investment returns differently from super funds and other comparison websites.

        Everyone deducts investment fees and tax from returns. However, Chant West shows investment returns before the deduction of percentage-based administration fees and any ongoing adviser commissions. Other comparison websites and super funds typically report investment returns after these costs.

        Chant West's approach means that its reported performance figures can be up to 1.5% pa higher than what the super fund would report.

        No comparison service or fund deducts fixed dollar administration or member fees (e.g. $50 per year) from reported investment returns. This is because their impact depends on the balance in your super account. A $50 per year member fee is 0.5% of a $10,000 super account, but just 0.05% of a $100,000 account.

        Don't assume a top-rated fund will get above-average investment returns.

        The golden rule is to do your homework when choosing a super fund and don't rely solely on super comparison websites.

• 

  Drifta on 01/04/2015 - 22:51

  Thanks Squeeb.

  Wasn't aware of this. Thanks for letting me know!

  Certainly can make a huge difference as my super increases. I've consolidated currently with Kinetic Super as i have <10K so will have to keep my eyes peeled and maybe change across to Hostplus or another provider in the not too distant future

• 

  sickllama on 02/04/2015 - 17:03

  Without considering your specific circumstances or goals, here's some general info for someone in their early twenties.

  Find the cheapest fund that has a high growth option (80% plus in growth assets such as shares and property) and stick with it. High growth is a good option because it will be over 40 years until you retire and you can ride the volatility of the market. Aside from asset allocation (this is a fancy way of saying what you invest your money in), the next big determinant of how much money you'll retire with is the fees. The difference between paying 0.5% vs 1.0% in fees over a working life is HUGE. Think about how much time you spent shopping around for a deal on a tv or holiday. Now multiply the savings by 100 and this can give you a perspective on how important it is to shop around for super.

  Bonus tip, when you get your first full time job earning 50k+ put an extra 5 or 10% into super. You'll never miss the money and the difference it will make will be huge. Super is one of the best ways to pay less tax.

• 

  His_Holiness on 02/04/2015 - 17:19

  +1

  What do you do for work? Some Enterprise Agreements mandate what Super account employees have to have and do not allow employees a choice of fund. No point doing all the research and choosing a preferred fund only to find out you do not have a choice to begin with from your current employers. If that's the case roll all your Super into that one account for now.