- Published on 03 Sep 2021
- - What is Financial Planning?
On July 1, the Federal Government announced a new tool available to all Superannuation members to better understand the performance of their funds compared to the wider industry.
Since super began some 30 years ago, Australian consumers have been largely disengaged with their Superannuation. Most likely because the complicated system we find ourselves in. In that time, members have been powerless to make informed decisions about the basic step of choosing a provider, often simply accepting the fund offered by their current employer.
Underperformance has been an issue since Superannuation was first introduced in Australia by Paul Keating in 1992. Given most people give their Superannuation statements a cursory glance before filing them, it is almost impossible to compare your fund's performance with the wider industry.
Now is time to check your Superannuation’s performance
Go to https://www.ato.gov.au/YourSuper-Comparison-Tool/ to get the ball rolling
The first thing to note is this tool only compares the MySuper options offered in the marketplace. The MySuper option is a default option for members who haven’t made an active choice in relation to how their Superannuation is invested (Conservative, Balanced, Growth, High Growth etc.).
Because this tool only compares the MySuper options, you may find the fund has other options which have performed better. As Jessica Irvine (Senior Economics Write with SMH) notes in her article dated July 10, 2021, “where there’s smoke there’s fire, so I reckon it’s still worth checking how your fund’s MySuper returns compare”.
There are a few simple steps you really need to know when you first sit down to use the tool. I would grab a cuppa as this may be a 15-30 minute exercise (but time well spent in my opinion).
- Click on the filters button to enter your age and fund balance. This is important when comparing the default MySuper offerings which are age-based default selections.
- You might want to consider ticking the “Exclude restricted funds” as these funds are generally available to people in certain occupations or employer groups and will only confuse the issue
- You can view more than the default 10 funds per page by changing the results per page from 10 to 20,50 or 100 and finally,
- You can sort performance of the funds from high to low and vice versa by clicking on the 7-year net return button at the top of the table on the right-hand side
Please remember this is a tool, although informative, only provides a comparison of the MySuper default funds.
Lastly, please remember not to underestimate the value of Independent financial advice. The site provides an informative link on seeking independent financial advice. Click here for the link to the Money Smar page outlining what should be considered when choosing a financial planner to help you.
Why not take the next step and talk to a financial planner?
LifeTime Financial Group are specialist (holding appropriate accreditations) advisors who are ideally positioned to assist you in planning for your financial future.
If you would like to discuss your current Superannuation position or wider financial planning needs, why not call us today on 03 9596-7733? There is no cost or obligation for our initial conversation/meeting.
LifeTime Financial Group. A leading privately-owned Melbourne-based Financial Planning practice with no ties to any financial institution.