13th Apr 2018

Industry funds beat for-profit super managers again

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Industry funds beat for-profit super managers again

Industry superannuation funds may be copping relentless criticism from the Turnbull Government, but in the five-star stakes, they are flogging bank and other for-profit funds.

Comparison site Canstar’s latest value-for-money rating of super has given five stars to seven funds – and all are not-for profit outfits that return all investment earnings to members.

Based on a person in their 60s with a super balance of $180,000, the best-value funds in 2018 are:

  • AustralianSuper
  • CareSuper Personal Plan
  • Catholic Super Member Plan
  • Energy Super
  • HESTA Personal Super
  • StatewideSuper Personal Plan
  • VicSuper FutureSaver



 

Despite industry and not-for-profit funds consistently outperforming retail counterparts, Revenue and Financial Services Minister Kelly O’Dwyer was bashing them again last week.

Speaking at the AFR Banking and Wealth Summit, she criticised industry funds’ calls for an increase in workers’ contributions to super, saying they were spending members’ money on lobbying.

“The superannuation industry is often very quick to point out that the only way that people can achieve higher incomes in retirement is by compelling an ever-increasing amount of wages to be sacrificed into superannuation. But they would say that wouldn’t they?” Ms O’Dwyer said.

She continued that fund managers stood to benefit from extra bonuses if the super guarantee was increased from 9.5 per cent to 12 per cent.

“And that is before you take into account all that additional money sloshing around for other cultural practices that have built up along the way. For example, members of superannuation funds having to stand by and watch as their retirement savings are spent on straight-out political advertising or dubious sponsorships of union congresses.”



But Canstar was full of praise for the super seven, saying they represented outstanding value.

“These 5-Star recipients have demonstrated robust net investment returns across the previous five years, as well as competitive product offerings, specifically when it comes to financial advice, tools and education, member access, contribution methods and beneficiary options,” it said.

A spokesperson for Canstar said 63 funds of all types were assessed for the list, including public offer funds, whether they were industry, retail, public sector or profit for members.

Is your superannuation invested by a for-profit manager or an industry fund? Would you swap your super money between funds to achieve a better return?

Financial 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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COMMENTS

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Adrianus
13th Apr 2018
12:03pm
If Bill Shorten's franking credit idea gets up then these returns (crediting rates) will be much lower.
Old Geezer
15th Apr 2018
4:11pm
It has been estimated some funds could be down up to 2% a year and that's ten of thousands people wont get when they retire.
Rae
13th Apr 2018
12:49pm
Has Ms O'Dwyer explained why retail funds are not performing as well? Perhaps it's the money spent on advertising and lobbying of the LNP.
Tib
13th Apr 2018
1:08pm
Not lobbying the LNP , funding their election campaigns and paying a little extra so that the LNP will legislate against industry funds. They don't want anyone affecting their ability to rip us off.
MjP
13th Apr 2018
1:13pm
Well said Rae and Tib
Anonymous
13th Apr 2018
3:19pm
Idiotic comment

Your fund manager charges you a feee as per your contract
Tib
13th Apr 2018
3:46pm
Raphael we all know the banks and the other profit making super funds are making a fortune and are not above making donations for political influence. The industry funds out perform them at a lower cost. Yes the banks and their friends do charge you the very high fees as described on your contract but only a fool would sign one. Without any doubt they would like to see the industry funds disappear and would be willing to pay for it using those very high profits. Hence the reason why the LNP minister is making so many noises.
George
13th Apr 2018
10:58pm
Exactly, Rae, in fact all O'Dwyer's criticisms apply to the Retail funds as well (with the only difference being who they lobby for)!

The bottom line is what customers are interested in (Raphael would agree, I think), and Canstar has listed who are doing the best. So O'Dwyer should seriously take that on board and clam up.
Cosmo
13th Apr 2018
1:56pm
I have two comments;
Firstly, I am convinced that politicians in general but the Conservative-Liberal party in particular does not want people to be financially independent or even financially literate because if they were, they would no longer be able to bribe the electorate with the odd crumb at election time; they would be both financially and largely politically independent and that would be a bad thing for politicians. That's why the Cons-Libs have always resisted raising the Super Guarantee.
Secondly, be very careful about reported fund performance. As the surveyors, The Rainmaker Group told me, they do not survey for customer service, just financial performance. There is no point in having a larger pot of money in your super account if you can't get access to it or manage it the way you need to. Anyone thinking of moving to the so called top performing fund should first look at https://www.productreview.com.au/p/australian-super.html and you will see what well over 100 customers think about this fund and its member's service.
Tib
13th Apr 2018
8:45pm
Only 100 look up Telstra complaints. I'm in Australian super, I'm happy.
Sal
13th Apr 2018
2:52pm
These Canstar reports are a waste of time. They only look at a small number of funds and if you look at the methodology of the report at https://www.canstar.com.au/wp-content/uploads/2018/03/2018-Super-Methodology-1.pdf the performance of the fund only makes up 50% of the rating. They also include insurance premiums which isn't superannuation.
Adrianus
14th Apr 2018
9:03am
Correct Sal, many of the industry funds are at the bottom.
Old Man
13th Apr 2018
3:03pm
Sure, some funds do better than others but wouldn't it be nice to have legislation to stop fund managers using members' money paying exorbitant fees, remunerations and donations to outside parties. Members would have a higher return and members are the ones who own the money in the funds, not the administrators.
Adrianus
14th Apr 2018
9:33am
Agree. What I don't understand is that Fund Managers can increase their fee once they get past the hurdle return but they don't reduce the fee when the credit investment rate is poor.
Cosmo
13th Apr 2018
3:11pm
Well legislating to stop funds spending our money on lobbying would be fine in a perfect world. But who else then would do the lobbying to publicise and prevent greedy politicians from getting their hands on retirees funds?
tj
14th Apr 2018
11:03am
Two points i would like to make
One . Super funds have two sets of fees ,one part is a flat fee the other part is commissioned based .If the fund loses out if they do not earn a healthy return they make it up on the flat fee side.
Two .In the event of the death of the superannuate ,where the proceeds go to siblings the govt. takes 15%
Old Geezer
15th Apr 2018
4:12pm
Would I have my super in any of these funds? NO.


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