Compare the pear
We have all seen the tv ads where they compare the virtuous industry super fund against the dastardly retail super fund, right?
Well, I met with a couple recently and one had an industry super fund and the other had a big retail super fund. Based on all those ads, you would naturally assume that the industry fund would be cheaper – but turns out, this was wrong! Surprise, surprise, the retail fund was cheaper!
The retail fund had recently reduced its fees, perhaps in response to a well-deserved roasting in the Royal Commission or increased competition. Also, the industry fund fees seemed higher than I had thought they would be. Checking further after the meeting, I realised that the industry fund was now complying with the increased disclosure requirements recently introduced and now flowing through into member super statements and Product Disclosure Statements. The additional fees had always been there, they just hadn’t been disclosed.
This was a great demonstration of some of the difficulties in comparing two super funds. Fees of course are one key aspect but there are other aspects to consider such as investment choice, asset allocation, transparency of investments, tax efficiency and flexibility.
I’m reminded of the old saying you shouldn’t mix apples and oranges. Maybe we should change this to you shouldn’t mix pears and oranges. Don’t try and compare the pear – you may just end-up with fruit salad. Seek advice as to whether an industry fund, a retail fund or perhaps a Self-Managed Super Fund is the right choice for you.
If this article has got you thinking, and you have further queries or you’d like to discuss your super fund you can contact Bruce Chisholm, Highview’s Financial Planner on (03) 5990 1000 or email firstname.lastname@example.org
Article written by Bruce Chisholm, Financial Planner at Highview Accounting & Financial.
Authorised Representative No. 1235025 of InterPrac Financial Planning Pty Ltd Licence No. 246638 Highview Wealth Solutions Pty Ltd Trading as Highview Accounting & Financial
Bruce has written his article for general information purposes only and it does not constitute personal advice. This information has been prepared without considering any individual’s objectives, financial situation or needs. You should not act solely on the basis of material contained in this article. We recommend that formal advice is sought which considers all your individual objectives and needs.