You have reviewed your superannuation and have decided you need a new super fund. So what to look out for when deciding which super fund to join.
Fees & Expenses
Fees can have a considerable impact on how much you will have in super at retirement. According to Money Smart “A 1% difference in fees now could be up to a 20% difference in 30 years.”
Unfortunately, there are many fees that your fund can charge from admin fees, to membership fees, to investment fees. Look at how they are charged some are charged weekly, have minimum and maximum charges. Other fees relate to transactions, eg. buy and sell of investments. Other are expenses related to your investments are calculated based on the values of your investments.
Fees on some super funds maybe suited to those with smaller balances, while other super funds may be more cost effective to those with larger balances.
The ways fees are structured are not the same across super funds, making direct comparisons difficult. If you get stuck, speak to a professional financial planner will have the tools that allow direct comparisons.
Some super funds only have limited options on how you can invest your super money. This may be suitable for someone who wants to have a leave it and forget attitude. If you want to have a bit more control on how your superannuation is invested, then you may want to consider super funds that offer a wide variety of investment options. A number of super funds now offer you the ability to choose which shares you can invest in.
Most super funds offer life insurance, TPD insurance and income protection insurance. The level of cover, the conditions and the cost can vary widely between super funds. These details can be found in the respective Product Disclosure Documents (PDS) and Insurance guides. Just like with fees, comparing insurance covers between super funds can be difficult and time consuming. Speaking to a professional financial planner can make this process a lot easier. They can also provide advice on insurance outside super which can offer superior benefits at competitive cost.
Consider the size of the provider in terms of number of members and their funds under management. Who backs the provider? What are their service and administration team like? Wil you be able to transact over the phone? Bigger is not always better, but can give you guidance on how established the provider is.
Things to Consider
Selecting the right super fund for you can significantly go a long way in achieving your retirement financial goals. There are over 500 superannuation funds in Australia. A professional financial planner will save you the time and headaches when it come sorting through the funds, and provide advice to which super fund is the most appropriate for you.
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Disclaimer: Information on this site may be regarded as general advice. That is, your personal objectives, needs or financial situations were not taken into account when preparing this information. Accordingly, you should consider the appropriateness of any general advice we have given you, having regard to your own objectives, financial situation and needs before acting on it. Where the information relates to a particular financial product, you should obtain and consider the relevant product disclosure statement before making any decision to purchase that financial product.
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