On Monday, the Banking Royal Commission turns the spotlight onto Australia’s $2.6 trillion super industry, where mind boggling numbers are the norm: like last quarter’s contributions totalled $25 billion!
As with the banks, the Royal Commission will be looking at fees and governance.
The thing about super is that most of us don’t actually bother with it much at all… until it’s too late.
We let our employer choose our super supplier and rarely look at the fees and charges – or even the balance!
I know. Sounds mad, doesn’t it!
There is a growing campaign for the government to provide comprehensive, easy-to-understand performance data on every superannuation investment free on the internet. And to make switching easier.
The Australian Prudential Regulation Authority publishes lots of super fund data, including fees, membership profits and insurance as well as performance.
But it’s too hard to compare performance.
Here at Really Simple Money, we think super isn’t that complicated.
A recent SuperRatings survey showed industry super funds like HOSTPLUS were the best performing balanced option in the last financial year, returning 12.5%, following by AustSafe on 11.4 per cent and AustralianSuper at 11.1%.
And guess which funds have the lowest fees. Yep. Hostplus and AustralianSuper.
Pollster Roy Morgan announced recently that their research shows that industry superfund members with balances over $5,000 had higher levels of satisfaction with their fund’s performance compared to those with retail and self-managed funds.
Even among members with balances of $700,000 or more industry super funds are well ahead with a satisfaction level of 87.5%, compared to only 77.9% for retail funds and 82.7% for SMSFs.
We can see why.