Are you in a dud super fund?

[Marisawright]

Interesting email from the Barefoot Investor.  Apparently there is a new report from the government on the performance of superannuation funds.  

Apparently it's long and boring so here is the analysis from the Barefoot Investor.  According to him, the worst super funds are hoping that you never read the report: 

"OnePath was like my Year 8 report card: a total and utter sh…earing show (as my father would say). OnePath was singled out by the regulator for having no less than 33 dud super funds. 

Thirty-three! 

OnePath was joined in veggie maths by BT Funds Management, Colonial First State, Auscol (Mine Super), Perpetual Super, MLC Super – whose report cards revealed “significantly poor performance”.

Some of the funds that were singled out for charging high admin fees include Verve Super (who market to women), Spaceship Super (who target millennials), Student Super (who need a detention), and the ironically named Cruelty Free Super (well, except for their barbaric admin fees). 

And last but not least, Equity Trustees appear to be really struggling with their pencil grip, after being singled out by the regulator for both high fees and poor returns."

If you're in any of those funds, I'd be studying the report and looking into moving funds.  I msut say that judging by past experience, BT Funds Management and MLC are both useless, which is surprising when you consider what big names they are.

https://www.apra.gov.au/sites/default/files/2023-04/Choice Heatmap Insights Paper.pdf

 

Edited May 29, 2023 by Marisawright

[rammygirl]

It can make a huge difference when you retire so check your super , it isn’t hard to switch. 

[Steve Elliott]

As a financial adviser, It is imperative that everyone takes a close interest in their Super not just in terms of fees and performance but also in terms of whether the investment mix matches your individual objectives and risk profile. Your asset allocation, or mix between defensive and growth investments also has much to do with your time horizon in terms of how long you have until your retire and move from accumulation phase to income phase. Also, we all need to be very wary of heavily promoted schemes which target those with passive super investments. This is a huge topic, further complicated by some big differences between the respective pension/super regimes in the UK and Australia. If in doubt, seek some professional advice from a financial adviser who specialises and is qualified in this space.  My plate is full at the moment but there are some very good advisers out there.

[InnerVoice]

Thanks for sharing, Marisa. I'm pleased to see that QSuper isn't amongst this list of lead balloons! I've been with them 12 years and have been very happy with their overall performance, although if I'm been honest I've been lazy in making comparisons with other super funds. I still retain the services of my UK IFA. I allocate my investments within QSuper based on what he has determined is my appetite to risk and long-term retirement goals, and up to now it's worked pretty well for me.

[Parley]

6 hours ago, Steve Elliott said:

As a financial adviser, It is imperative that everyone takes a close interest in their Super not just in terms of fees and performance but also in terms of whether the investment mix matches your individual objectives and risk profile. Your asset allocation, or mix between defensive and growth investments also has much to do with your time horizon in terms of how long you have until your retire and move from accumulation phase to income phase. Also, we all need to be very wary of heavily promoted schemes which target those with passive super investments. This is a huge topic, further complicated by some big differences between the respective pension/super regimes in the UK and Australia. If in doubt, seek some professional advice from a financial adviser who specialises and is qualified in this space.  My plate is full at the moment but there are some very good advisers out there.

I'm sure there are some very good advisers out there, as well as some very bad advisers out there, as well as the majority being very average advisers out there.

The difficulty for us punters out here is knowing which is which, and if your plate wasn't full how you would convince me which camp you fall into.

Edited May 30, 2023 by Parley

[Parley]

I'm in an MLC fund but not the one on the list. MLC is now owned by IOOF by the way so interesting to find out how that affects their performance.

[Marisawright]

16 hours ago, Parley said:

I'm in an MLC fund but not the one on the list. MLC is now owned by IOOF by the way so interesting to find out how that affects their performance.

APRA only looks at the default funds for each provider.  

I wouldn't be happy if my fund had been bought by IOOF.  It's had more than its fair share of scandals and dodgy trading in the past.

https://www.afr.com/companies/financial-services/ioof-knocks-off-rival-amp-as-worst-super-provider-20211007-p58y0z

Edited May 31, 2023 by Marisawright

[Steve Elliott]

16 hours ago, Parley said:

I'm sure there are some very good advisers out there, as well as some very bad advisers out there, as well as the majority being very average advisers out there.

The difficulty for us punters out here is knowing which is which, and if your plate wasn't full how you would convince me which camp you fall into.

Good point Parley. Even personal recommendations and referrals will not necessarily deliver a great outcome. I would certainly lean towards an adviser who is both independent and who charge on the basis of fee for advice as opposed to commission. Also, not all financial advisers are licensed to provide advice on Superannuation, so that's something to look out for. These days all advice must be delivered in writing through a statement of advice. Many financial advisers have quit the industry in recent years post the introduction of tougher regulation and higher educational standards. This doesn't guarantee you a great result but certainly improves  your odds in likelihood of receiving quality financial advice. There's a lot more info available on the government "Moneysmart" website.

 

[unzippy]

Is it a thing in Aus then, you switch your pension like you would car insurance?

 

[Ken]

5 minutes ago, unzippy said:

Is it a thing in Aus then, you switch your pension like you would car insurance?

 

It's easier than switching car insurance - but as with car insurance most people don't bother to do so.

[Ken]

On 29/05/2023 at 21:23, Marisawright said:

OnePath was singled out by the regulator for having no less than 33 dud super funds. 

 

OnePath also managed a lot of super funds that weren't duds. The risk here is of people moving funds out of one of OnePath's performing funds into a dud fund with another provider on the basis that the other provider has less dud funds. It's not going to help.

It might help if each provider only had one fund in that it would be much easier to track and compare performance, but that would obviously be seen as reducing consumer choice.