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How Does Your Super Fund Compare?

In this article:

What to look for when working out if your super fund is right for you.
 

According to a Roy Morgan Superannuation Satisfaction Report, industry super funds are leading retail funds when it comes to customer satisfaction. The report found that in the 12 months to February 2019, retail funds have shown declines in satisfaction at all levels, no matter whether people have small or large balances invested.

If you’re one of these dissatisfied customers, now might be the time to see how your fund stacks up. A fund that underperforms or slugs you with high fees could be slowing the growth of your retirement nest egg.

Which super fund is best?

The super fund for you is the one that suits your personal preferences and is relevant to your goals. The fund should cost-effectively invest your money and have a solid track record of performance. You should be comfortable with the level of insight, with transparency around fees and investment strategy.

Watch the fees

Super fees are often unnecessarily large and can limit the earning power of your account. It’s vital to know what you’re paying for; because a fee difference of 1% can have a significant impact on your super balance over time.

Some funds charge their administration fee as a fixed amount or a certain percentage of the super account balance. You may also be charged investment or management fees, performance fees, adviser service fees, insurance premiums and various miscellaneous fees.

Ask your super fund to provide a breakdown of the costs and an explanation of what you’re receiving. Compare your fees to Yellow Brick Road Super – we have one of the lowest fee structures in the market.

Changes to super you should know about

If you’re running your own business, or taking a break from the workforce, make sure you’re across these superannuation changes that came into effect from 1 July 2019:

  • If you haven’t contributed or engaged with your super in the last 16 months, your account will be classified as inactive and your insurance could be cancelled
  • If your account has a balance below $6,000 and has not received a contribution in 16 months, it will be transferred to the Australian Taxation Office (ATO)
  • The balance will either remain with the ATO until it is claimed or the ATO will attempt to consolidate it into another active account you might hold.

Take the first step

Rate the performance

Look to achieve a balance between your risk profile, your age and stage and your goals.

Review your fund’s historical investment performance and see how it stacks up against other funds by using comparison websites. Look at its investment returns over five or seven years. Historically, markets go through cycles, so the best way to judge performance is to look at the long-term performance, not the one-year returns.

Some funds may have higher returns, but also carry a higher level of risk. You want the money going into your fund to compound, so choose a fund with a good return on investment but without too high a risk of going backwards. In other words, look to achieve a balance between your risk profile, your age and stage and your goals.

When comparing funds, consider how different types of investment options will suit you now, as well as their suitability for the future. Yellow Brick Road Super offers three investment options. You can choose one or a mixture of all based on your needs.

How much insurance

Check what insurance your fund offers and what level of cover it provides. Many funds automatically provide income protection, life, and total and permanent disability (TPD) insurance.

Your insurance premiums are paid from your super, so be sure to know whether the cover is comprehensive enough to suit your needs. Also, check you’re not doubling up on other insurance policies you might hold outside super.

Yellow Brick Road Super provides a range of insurance options – life cover, terminal illness, total and permanent disablement and income protection – which allow you to pay for your insurance cover from your super.

Switching?

All super exit fees are now banned, which makes the process of changing funds straightforward. Speak to your local YBR representative to find out about our fast, stress-free way to apply for Yellow Brick Road Super

**The information on this article contains general information and does not take into account your personal objectives, financial situation or needs. If you require further information don’t hesitate to contact the branch directly.
 

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