Raffi PailagianMBA, BSc, DipFP
Adviser / Managing Partner
Superannuation is one of the cornerstones of any financial plan. Getting your Superannuation right can mean the difference between a comfortable retirement and spending your time counting pennies.
Traditional Super funds provide you with an enormous range of options. It can be confusing, because everyone tells you their fund, their structure, their options are the best. And it is hard to compare because often you are looking at apples and oranges. But the Superannuation options you choose can make a big difference to your final retirement amount.
If you are working in Australia you have no option but to have a Superannuation account. And that is a good thing. It’s never too early to start planning for your retirement. But you might not know of some of the real benefits of investing in Super over and above the 9.5% of your salary mandated by the government.
Broadly speaking there are two types of Superannuation accounts:
All Super accounts fall into one of these two structures.
One of the key decisions you need to make in relation to Super is whether to go with an Industry fund, a Retail fund, or if available to you, a Corporate Fund.
Industry funds are not-for-profit, and there are a huge number of them. Some of the smaller funds can only be joined by people working in their particular sector, but the larger ones can be joined by anyone. Most of these funds are Accumulated, and are low to medium in terms of costs.
Anyone can join these funds, which are usually run by banks or investment companies. They offer a wide range of investment options and are generally mid to high cost.
Are only open to employees. Some larger organisations run their own funds, while others use a retail provider.
As the name suggests, Public Sector Funds are only open to government employees.
In 2011 the Gillard Government introduced MySuper. This is a default account for people who don’t choose a specific fund when joining an employer. Retail, Industry and Corporate funds can offer a MySuper option if they choose. These accounts are designed to be low cost, simple and easy to compare. They offer a limited range of investment options, and according to the Productivity Commission Report of 2018, 1/3 of these funds underperformed the median in the preceding 10 year period.
All Super funds offer different investment profile options. How you choose which works best for you depends on:
Whilst the names of options within some funds may differ slightly, broadly speaking your investment options are:
According to Superguide.com.au, one in three Super accounts is an unintended multiple. This is not ideal as you are likely to be paying fees on each one. If you would like to find out if you have multiple or lost Super funds, a financial adviser can help you find them, and consolidate them into one account, optimising your return and minimising fees.
It can seem like a very complicated decision, but if you get the right advice it doesn’t have to be. Things to consider include:
And remember, nothing is forever. If you have a Super fund that is no longer right for you, for whatever reason, don’t be shy about doing the research, getting good advice, and changing if that proves to be the best option for you.
Manly Financial Services has many years’ experience in evaluating, choosing and planning Superannuation. If you would like advice on whether you are on the right track, give us a call on (02) 9976 3388, or click below and we will be in touch shortly.
Head Office: Suite 105-106, Level 1, 39 East Esplanade, Manly NSW 2095
Manly Financial Services Pty Ltd is a Corporate Authorised Representative (Representative No.: 321127) ABN 38 115 806 883 of Futuro Financial Services Pty Ltd, Australian Financial Services Licensee (AFSL 238478)
This website contains general advice only. You need to consider with your financial planner (or adviser), your objectives, financial situation and your particular needs prior to making an investment decision. Futuro Financial Services Pty Ltd and its authorised representatives (or credit representatives) do not accept liability for any errors or omissions of information supplied on this website.