What is a super fund?

Superannuation is money put into a fund of your choice by your employer over your working life for you to live on when you retire.

My employer set up my fund, what does that mean for me?

Then you likely have been defaulted into a standard investment product.

Many super funds make it easy for employers to set up default investments for their employees. It’s an efficient system for your employer.

What is a default super fund?

A default fund is a standard investment.

This can put you in the dark. With a default setup, you are unlikely to know how your money is invested or where you are on track for at retirement.

According to the productivity commission report of 2019, and the AFCA report which named and shamed 13 super funds, those default setups often come with low returns, fees for no service, and a myriad of other deficiencies.

The sooner you look into this the bigger of a difference it will make for you and your future. The alternative is to ignore it and just hope for the best.

What is an industry fund?

An industry fund was originally created for workers of a specific industry. For example, construction is usually CBUS, retail is usually Rest, and hospitality is usually Host Plus.

Therefore, a construction company owner of age 39, foreman of age 51, and new hire at the construction company of age 19, are often defaulted into the same investment.

This logic is not consistent with the best interest duty obligation of our partner financial advisers, because you are not the same person as everyone else who works in your industry, and therefore should not be invested the same.

My superannuation statement says I'm doing great!

When super funds send out their statements to clients, they often put how much their fund has grown at the very top. Take a moment right now if you have your superannuation statement and see what your super is telling you.

This number often includes your contributions, not the actual rate of return on your investment.

Here’s an Example. Let’s say you have $100,000 in your Super, over the year you invest 15,000, and your fund grew by 5%. Therefore, by next year, your fund would be at $120,000.

Is that a 5% return or a 20% return?

The real rate of return is 5%, but most statements will say 20%

Let’s wind back the clock and start at $100,000 again. You invest $15,000, and your Super lost 2% on the market.

Is that a -2% return or a 13% return?

The real rate is -2%, but most statements will say 13%

"I like my super fund and don't want to switch."

Then reviewing it and comparing it to best in show options should give you peace of mind.

Loyalty should be earned with great service and an investment that is aligned with your goals, situation, and risk profile. Every super fund corporation should be eager to compete for your business. If they aren’t, why not?

What we care about is how it is performing for you. We believe the right investment option for you is the one that puts you in a better position in retirement, according to you. At the end of the day, when you retire you get a cheque based upon a string of numbers after a $ sign.

You may also consider your insurances – do they cover what you need to cover and at the right amount?

Ultimately, we don’t work for any specific super fund corporation. We work on behalf of several financial advisory firms who are licenced to provide financial advice.

"My super fund is growing."

By how much? Is this with or without your contributions? Does the reported return include fees and your contributions, or not?

The only objective of our service is to see if it’s possible to improve your superannuation and your situation in retirement by conducting a factual review of your super and then connecting you with one of our licenced financial advisory partners.

When you retire, you get a cheque. The amount on that cheque depends on how much your super has grown over the years.

"My super fund has the lowest fees."

We often get what we pay for.

The fee is only one element of many that contributes to how much you will end up with at retirement. Your balance at retirement is likely the thing that matters more…

We want to help you find the investment that gives you the biggest cheque when you retire. Our partner financial advisers are able to assist you in determining if their advice is able to meet your best interests.

"Making any change is too risky."

All investments have risk – just like all choices, and non-choices.

This is why we connect you with a fully licenced financial adviser. Their job is to defend your money which reduces your risk. In fact, their livelihood depends on it.

The choice to ignore or improve a long-term investment like superannuation will have a compound effect year after year.

"I can't afford financial advice."

All advice pertaining to your super fund can be paid by your super. This means that there are no out of pocket expenses for you.