Super - Should I Be Combining Funds?

hubs1982 on 05/09/2020 - 15:45
Last edited 07/09/2020 - 14:06 by 1 other user

Situation is I left the previous job back in June and am about the start a new job in the coming weeks.

Super was with AMP on their Super Directions Fund with an balance somewhere between 50k and 60k.

Have signed up to Australian Super for the new job and will be choosing the High-Growth option (still decades away from retirement).

Received an email from Australian Super suggesting combining the funds from AMP.

Questions:
- Should I be combining?
- If so, should the combining be done now, given how volatile the market is?

Thank you!

Financial Superannuation

Comments

  • brendanm on 05/09/2020 - 15:48
    +16

    Yes, otherwise you are paying for two lots of fees, insurance etc.

    • hubs1982 on 05/09/2020 - 16:00

      Thanks for the advice. Will be doing so.

    • apsilon on 05/09/2020 - 16:33
      +4

      Exactly not to mention AMP is one of the worst funds anyway.

      • AndyC1 on 05/09/2020 - 16:49
        +1

        100% agree AMP V Australian Super are like bad or negative V good or excellent.

        AMP have changed their fee structure allot in the last few years and probably will continue to change them due to the problems that have with their super division hemorrhaging funds to other super companies.

        Should compare the returns over the last 5 and 10 years and then you will see the light…

        • hubs1982 on 06/09/2020 - 11:08

          Thanks, I should have looked at this in the past. I do remember receiving letters telling me that they are reducing fees. Having looked at the "funds out" section, it appears that a large chunk gets eaten by the Government as contributions tax.

          Hopefully Australian Super's performance will be better than AMP's (as a minimum - the investment earnings can cover the member fees, insurance and tax/duties).

          • brad1-8tsi on 07/09/2020 - 09:31

            @hubs1982: You will still pay the same contributions tax. 15%.

            You might also consider if you need the insurance offered.

            My GF is in AMP. Generally they have high fees but her company gets a significant discount on fees and AMP are surprisingly competitive and get good returns. It wasn't worth moving to an industry fund to save $100.

            Definitely combine funds.

            Also have a look at what your investment option is and ensure it is appropriate for your age and risk profile.

            • hubs1982 on 07/09/2020 - 17:04

              @brad1-8tsi: Thanks. Have declined the insurance with Australian Super. Note your comment regarding AMP, however, I have decided to move away from them to get a "fresh" start. Have chosen high growth (which I guess means high risk) given I am still decades away from retirement.

              • brad1-8tsi on 07/09/2020 - 17:17

                @hubs1982: I don't blame you. I would move too.

                I'm late 50s and still in high growth. I have a high appetite for financial risk

      • hubs1982 on 06/09/2020 - 11:02

        Thanks, can't agree more, just took a closer look at the 2018 and 2019 statements (which I haven't really looked at before), the investment earnings for the 2 years were less than the funds out (taxes, fees and premiums).

    • bobbified on 05/09/2020 - 16:50
      -4

      otherwise you are paying for two lots of…insurance etc

      That's not always a bad thing. I keep five separate super accounts for this reason!

      • MrHyde on 05/09/2020 - 17:14

        Have you read your insurance's PDS? In many of them, you can only claim against one of them for an incident.

        • bobbified on 05/09/2020 - 17:19
          +1

          SCI/IP insurance is the only one to watch out for. You cannot have a total of more than 75% (plus super) of your regular income as a payment even if you hold policies totaling more than that. The reason for that was so that it doesn't discourage someone from returning to work after a period of sickness/disability. The same doesn't apply for death and TPD insurance.

          • hubs1982 on 06/09/2020 - 11:15

            @bobbified: Thanks for the reminder, otherwise I would have forgotten about the trauma cover that I have with OnePath.
            I did previously have IP insurance with them in the past, but given the very high premium I dropped that earlier this year.

            • jv on 07/09/2020 - 17:06

              @hubs1982:

              I would have forgotten about the trauma cover

              Thanks I totally forgot about that.

              I should be able to make a claim for what Dan has done to us.

    • DashCam AKA Rolts on 05/09/2020 - 18:51

      This! Those extra fees are sapping capital from your super balance.

      • hubs1982 on 06/09/2020 - 11:17

        Thanks for the advice. Will be paying more attention to my super in the future.

  • jimbobaus on 05/09/2020 - 15:48

    always better to be in a single retail fund
    Roll over your super to the best performing fund
    This way you only pay fees etc once

    • hubs1982 on 05/09/2020 - 16:00

      Thanks for the advice. Will be doing so.

  • bobbified on 05/09/2020 - 16:45
    +3

    You should not rollover all your funds into one without considering any potential impacts on your insurance cover levels and conditions. You could make irreversible changes to your insurance eligibility.

    • AndyC1 on 05/09/2020 - 16:54

      Watch this as you may end up paying allot more at AMP for insurance than at Australian Super. I compared the two earlier this year and moved from AMP to Australian Super and saved allot on insurance with no downside I could spot from reading both PDS's.

      Some companies (few now days) pay for some of the Super insurance costs up to a certain amount, so check your new employment offer/conditions to see if they pay insurance as it will save you money if they do.

      • bobbified on 05/09/2020 - 17:03
        +4

        I'm actually referring to the insurance cover levels and eligibilty rather than the premium costs.

        If someone has a current insurance policy linked to a super account and they develop a major medical condition, any new insurance cover that person takes up will likely have that issue as an exclusion (except in the cases where there's an AAL, but then the AAL is usually quite low). So if that person doesn't realise and rolls their super from their earlier account into their new account to "save on fees", they will close their earlier policy and lose the only insurance cover they had for that medical condition. From then on, that medical condition has to be declared as "pre-existing" and it will always likely end up as an exclusion to new policies.

      • hubs1982 on 06/09/2020 - 11:23

        Thank you, looking at the statements I have been paying somewhere between 300 and 400 each year. Hopefully whatever cover Australian Super will providing will be better value. Having looked at the employment contract it appears that they will be covering Income Protection/SCI.

    • hubs1982 on 06/09/2020 - 11:18

      Thanks for the advice. Will speak to AMP tomorrow when they are back at work.

  • Candour on 06/09/2020 - 13:26

    Amp may have had ethical problems with the royal commission.into banking. the big banks also. Industry funds may have lower fees. you need to determine the risk vs return. net return after fees and taxes like industry super funds do. Not retail funds like AMP. Look for industry funds with a fixed fee. host plus recently had this for their pension account. most funds may use the same investment managers. So the asset allocation and the mix will determine return. Things change. Review your funds. learn about investment allocation o assets, risk/return, and view their choice plus options as you can reduce fees through direct ETFs.

    • hubs1982 on 07/09/2020 - 17:02

      Thank you. Understand the relationship between risk and return (happy to accept high risk for high return atm given there are still many many years before I can access my super). I will make a habit to review my funds on a yearly basis.

      • Candour on 08/09/2020 - 09:05

        We are in very high risk worldwide now of recession/correction. You may have some time before the market bottoms. Fixed interest and safe bonds are best or the short term. i am not giving any advice here. just an opinion, without prejudice. Do not believe sell side analysts or even industry funds who may give you advice which is inapplicable in this unknown virus/recession. the virus will determine the macro and the us will determine our Australian micro companies. I have put my funds into diversified interest though even there is downside risk, just to be sure my funds are safe. Read credible sources of advice. Have not found many in oz. I seek US sources and you need to ind those you trust including opposing views to have a balance and not any bias.

  • justgooddeals on 07/09/2020 - 17:18

    Yes. Combine

  • Terbo on 07/09/2020 - 21:56
    -1

    Love the ignorance masquerading as knowledge in these posts. Super Directions is an old AXA fund that AMP inherited, they cant just close them down, not their fault more your lack of interest. AMP North super is actually one of the cheaper market offers. There is only one ASX and Aust Super doesn't have special investment powers that AMP dont to get better returns, asset allocation is the primary difference in returns. The cheapest isnt the best and more expensive isnt always worse, Aust Super is actually mid range for fees when you add in all their extras in the fine print, and they have a Growth tilt for their premixed funds so have done well in rising market if you are trying to compare apple's, they also play with numbers at EOFY to smooth returns, ok if not needing to withdraw. Look at 3 and 5yr returns not last 12 mths, that's just good/bad luck re timing and holdings. FYI many industry super insurance now more costly than retail and nearly always worse definition, dont hope it's better, read the policy or be very disappointed at claim time. Good luck

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