It’s simple to pick an excellent super fund if you know what to look for.
You’ve begun your first job, and your boss wants to know to which super fund he or she should pay your mandatory contributions. You’ve been working for a while, but you’re concerned that your superannuation account balance isn’t growing as quickly as it should due to low investment returns. You wish to open a new super fund account that is different from the one your employer has set up for you.
The issues are the same whether you’re choosing your first super fund or a new one to switch into: what should you look for and how do you know it’s a solid fund?
Knowing the four basic characteristics of a super fund might help you make the best decision. Superfunds that outperform their peers in each of these areas are considered good. Please see the table below.
The Four Core Elements of Every Fund
Investment menu: It offers a variety of options for investing your superannuation savings.
Fees: It simply charges fair fees. Make sure to evaluate all expenses, including admission fees, administration fees, membership fees, and all investment fees and charges, when comparing fees.
Insurance: Death, total and permanent disability (TPD), and income protection insurance are all available through most super accounts. If you want this insurance coverage, make sure it is adequate and reasonably priced.
Extra features: Most super funds offer a variety of supplementary features and services to assist you in managing your superannuation assets, planning and preparing for retirement, and monitoring the performance of your super fund. Above all, your retirement fund should be simple to manage.
Five Signs of a Good Superannuation Fund
1. You have faith in the company and the individuals in charge of the fund and its superannuation products.
2. Over the medium term, such as three or five years, the investment options you intend to use generate above-average investment returns.
3. It has reasonable fees. The typical annual fee charged by super funds is roughly 1% or less.
4. It provides cost-effective insurance as well as the forms of insurance you require. A mix of death, TPD, and income protection coverage may be available.
5. It provides a lot of extra features and services, and it’s simple to use.
Narrowing down your choices
Follow these five simple steps to help you limit down your super fund options.
Step 1: Flexibility and options
Do you prefer a straightforward, easy-to-understand super fund or a more complicated one? Do you want a wide range of investment options? Do you want the fund to make investment decisions for you or do you want to make them yourself? Do you want the fund to consider environmental and social considerations when selecting firms to invest in, invest in technology, and avoid tobacco corporations? Do you want your fund’s investments to be publicly disclosed on a regular basis?
Do you want insurance, and if so, what kind and how much do you want? Do you want to be able to log into your account from your phone or tablet? Do you want webchat for your fund? Do you need help with that or would you like to speak with a financial advisor? Do you want to be able to package additional services such as house loans, health insurance, and shopping discounts?
These are important because the more services you want, the greater the fee, and the higher the investment returns on your superannuation fund must be to meet the fees. To put it another way, if you want a lot of control over your super fund and want it to be flexible, seek for funds that offer a variety of investing and insurance options. However, be prepared to pay a greater price.
2. Kick the tyres
To see if they reply, go to their websites, read their official documentation, such as their Product Disclosure Statement, call or email them, use webchat to contact them, or send them a social network message.
Step 3 – Everything can be found in the investment menu.
To see if they reply, go to their websites, read their official documentation, such as their Product Disclosure Statement, call or email them, use webchat to contact them, or send them a social network message.
Step 4 – Does the fund have a good research rating? There are a number of independant research houses that provide annual reports on their views of a number of superannuation funds on the market.
Step 5: Make a list of questions to ask.
If you’ve narrowed your options to only a few funds and want to compare them in depth, why not request a Member Report Card from the SelectingSuper team?
In conclusion, both type of Superannuation funds have their pro’s and con’s and if you are unsure about which one is best for you then it is best to speak with a professional about your options as this will eventually be your nest egg in retirement with significant tax benefits, potential inheritance for your beneficiaries and also possibly one of your biggest assets besides your family home.
Contact us and find out more.
The information in this website and the links has been prepared for general information purposes only and does not take into account your personal objectives, financial situation or needs. It is not intended to provide commercial, financial, investment, accounting, tax or legal advice. You should, before you make any decision regarding any information, strategies, or products mentioned on this website, consult an Authorised Financial Advisor or Professional to consider whether it is suitable and appropriate for you and your personal needs and circumstances.
