Explained … how to compare superannuation funds

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The banking royal commission has revealed some shocking practices by many superannuation funds, and the ensuing revelations may have you thinking about changing your superannuation fund, but how do you go about it?

Super comparison websites can be useful to help you compare super funds, but how do you know what to believe?

Super comparison websites rate different super funds, but you shouldn’t choose your super fund on the website rating alone. You need to make sure you select the fund that works best for you and your retirement situation. ASIC’s MoneySmart website has some good advice to help you choose what you need from a super fund.

Some of the superannuation comparison sites you can choose from are:

All these websites have some information for free, but some also offer more detailed information for a fee. 

Each super comparison website has different views on the best way to rate super funds. For example, some place the highest importance on fees. Others may prioritise investment performance and strategies. 

Before choosing a superannuation comparison site you will have to decide on what you consider the most important factor in performance and then read the explanation of the website’s scoring system to check whether it aligns with your values.

No comparison service or fund deducts fixed dollar administration or member fees (e.g. $50 per year) from reported investment returns. This is because their impact depends on the balance in your super account. A $50 per year member fee is 0.5 per cent of a $10,000 super account, but just 0.05 per cent of a $100,000 account.

The golden rule is to do your homework when choosing a super fund and that you don’t rely solely on super comparison websites.

Have you ever switched super funds? How did you decide? What advice would you offer others?

Disclaimer: All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for the ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances. 

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Written by Ben

6 Comments

Total Comments: 6
  1. 0
    0

    Have you ever switched super funds?

    yes

    How did you decide?

    H+ had more direct ways of investing than A Super.

    What advice would you offer others?

    there are other hidden traps which take too long to write in this comment. ratings agencies are biased to give good reports to even bad funds. balanced funds have dodgy defensive investments which are not cash or bonds so they are not comparable. ‘active’ management is a furphy used by some funds when they are closet index huggers. many don’t beat the index. 1, 3 and 5 year returns are noise. at least 10 year returns need to be used.

  2. 0
    0

    We switched from AMP at a time when one of their advisers did tried to get us to put all our eggs into one company basket (AMP). I did not like hios attitude and so they lost the lot and we now have our own SMSF supported by Macquarie which has worked well for us. We did not lose much from the GFC and are significantly ahead of where we were 10 years ago despite being on a retirement pension from the SMSF. We have always paid our adviser on a fee for service basis.

    After my formal retirement I did some casual work for the University of Canberra and was forced to have the 9% levy paid into their super fund. It automatically deducted life insurance and fees for administratin etc. After the first year as soon as money was paid into this account it was automatically switched to avoid their costs, especially the insurance, which were really a rip off. Macquarie advised us that, given the level of assets and funds available to us, insurance was not necessary.

  3. 0
    0

    I would not have suer if I didn’t have my own SMSF.

  4. 0
    0

    I don’t really care what you have, OG.


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