Retirement
‘Take the control back’ from super funds: adviser
A lot of people have “no idea” when it comes to super but it’s up to Aussie consumers to “take a bit of that control back”, and force the industry to improve, an adviser has said.
‘Take the control back’ from super funds: adviser
A lot of people have “no idea” when it comes to super but it’s up to Aussie consumers to “take a bit of that control back”, and force the industry to improve, an adviser has said.
“One of my biggest frustrations about consumers and superannuation is they have no idea,” Hewison Private Wealth director and adviser Nathan Lear told Nest Egg.
“They start a job and they’re like, ‘I'll put my money in whatever fund’, they don't research it, they don't know what they're paying, they don't even know if they've got any insurance in there.
“I like to put it back on the consumers a little bit and say, ‘Take a bit of that control back, understand what you're paying and seek advice.’”
His words follow the Productivity Commission’s damning report on the industry last week, which described the system as an “unlucky lottery” for Australian workers and retirees.
The report said the $2.6 trillion super system suffered from out-dated architecture, structural flaws and “entrenched underperformance”. All flaws contributed to a $2.6 billion sting from excess fees and “zombie” insurance policies.
“These problems are highly regressive in their impact — and they harm young and lower income Australians the most,” said the deputy chair of the Productivity Commission, Karen Chester.
Recognising this, the Productivity Commission proposed new entrants to the workforce select a super fund from a top 10 list curated by an independent government agency.
Mr Lear agreed that a weak super fund can lead to “thousands and thousands and thousands” of dollars lost from the retirement balance, but disagreed with the Productivity Commission’s proposal.
“A government agency only giving a list of 10 funds; who's to say that their investigations are going to be better than a quality advice firm?” Mr Lear asked.
He said the proposal could also stifle innovation by limiting individuals’ control and flexibility.
“Obviously the government wants to protect Australians' interests and make sure they're not getting ripped off, and I completely appreciate that and maybe there are other ways they can do that,” Mr Lear said.
For individuals, he said it comes down to understanding how much you’re paying, and what you’re paying for.
“Fees can be quite tricky for the non-sophisticated investor to fully comprehend and appreciate because there are different layers. I encourage any Millennial or super investor to have a real good look at the website of the super provider, the fee section of the PDS, and just really work through the different layers,” Mr Lear said.
Typically there’s an investment fee, an administration or accounting fee, an insurance fee and potentially an investment management expense ratio.”
He said this is where he would start, given the power of compound interest.
“Keeping those fees as low as possible, that's going to get you in a good place to start,” Mr Lear concluded.
RELATED ARTICLES
Superannuation
Payday Super bill introduces new challenges for SMBs, reveals Employment Hero CEO
The introduction of the Payday Super bill to the Australian Parliament has sparked a significant response from the business community, particularly among small and medium-sized businesses (SMBs)Read more
Superannuation
Rest urges Parliament to expedite payday super legislation
In a significant move towards enhancing retirement outcomes for Australian workers, Rest, one of the country's largest profit-to-member superannuation funds, has expressed strong support for the ...Read more
Superannuation
Recalibrated super performance test aims to enhance accountability and investment opportunities
In a move that signals a shift rather than a cessation, Australia's government has announced a targeted review of the superannuation performance test. This recalibration, prompted by the latest ...Read more
Superannuation
Super performance test faces a fork balancing member value productive investment and regulatory trust
APRA’s latest superannuation performance test results have reignited a high‑stakes debate: does the test optimise member value or unintentionally curb long‑term investment in housing, infrastructure ...Read more
Superannuation
Aware Super unveils innovative digital tool to boost retirees' financial confidence
Aware Super has unveiled a groundbreaking digital advice tool, Retirement Manager, designed to empower retirees by addressing their most pressing financial concerns. Developed in collaboration with ...Read more
Superannuation
APRA's super shake-up: Balancing accountability and innovation in the next round
Australia’s performance test has forced long-overdue transparency in super and accelerated consolidation. But as the regime broadens, its blunt edges are colliding with investment complexity, ESG ...Read more
Superannuation
APRA’s performance test is doing its job — but now it risks doing the wrong job well
Australia’s superannuation performance test has flushed out chronic underperformance and catalysed consolidation. But its latest results have reignited a bigger question: can a single, ...Read more
Superannuation
Rest invests in US-based REIT amid changes in debt financing markets
In a strategic move that underscores the evolving landscape of commercial finance, Rest, one of Australia's largest profit-to-member superannuation funds, has announced a significant investment into ...Read more
Superannuation
Payday Super bill introduces new challenges for SMBs, reveals Employment Hero CEO
The introduction of the Payday Super bill to the Australian Parliament has sparked a significant response from the business community, particularly among small and medium-sized businesses (SMBs)Read more
Superannuation
Rest urges Parliament to expedite payday super legislation
In a significant move towards enhancing retirement outcomes for Australian workers, Rest, one of the country's largest profit-to-member superannuation funds, has expressed strong support for the ...Read more
Superannuation
Recalibrated super performance test aims to enhance accountability and investment opportunities
In a move that signals a shift rather than a cessation, Australia's government has announced a targeted review of the superannuation performance test. This recalibration, prompted by the latest ...Read more
Superannuation
Super performance test faces a fork balancing member value productive investment and regulatory trust
APRA’s latest superannuation performance test results have reignited a high‑stakes debate: does the test optimise member value or unintentionally curb long‑term investment in housing, infrastructure ...Read more
Superannuation
Aware Super unveils innovative digital tool to boost retirees' financial confidence
Aware Super has unveiled a groundbreaking digital advice tool, Retirement Manager, designed to empower retirees by addressing their most pressing financial concerns. Developed in collaboration with ...Read more
Superannuation
APRA's super shake-up: Balancing accountability and innovation in the next round
Australia’s performance test has forced long-overdue transparency in super and accelerated consolidation. But as the regime broadens, its blunt edges are colliding with investment complexity, ESG ...Read more
Superannuation
APRA’s performance test is doing its job — but now it risks doing the wrong job well
Australia’s superannuation performance test has flushed out chronic underperformance and catalysed consolidation. But its latest results have reignited a bigger question: can a single, ...Read more
Superannuation
Rest invests in US-based REIT amid changes in debt financing markets
In a strategic move that underscores the evolving landscape of commercial finance, Rest, one of Australia's largest profit-to-member superannuation funds, has announced a significant investment into ...Read more
