Many super funds do much more than just help you save for retirement. Some also offer insurance, home loans, financial planning and shopping deals.
By Andrew Keevers

KEY POINTS
Super funds do much more than just offer super as most now offer insurance, advice support, online services, retirement products, home loans, non-super investments, access to direct shares and even shopping discounts. Their main job is nonetheless long term investments, so choose the fund with the best investment deals then worry about the extras. Funds that aren't adding extra services are lazy and you should find ones actually wanting to expand their services to meet your changing needs.

The ultimate objective of a super fund is making money for its members. It is the reason they exist. But can super funds do more for their members without impeding this fundamental mission and so you shouldn't have to wait until you retire before you start claiming at least something back from your super fund.
Super funds are doing this because they have created strategic alliances with insurers, banks financial planners, travel companies and other product providers and are using these to transform their products into almost one-stop-financial-shops.
The battle for your loyalty that this race has ignited is now so intense that some funds are updating their features lists and offerings to you nearly every month.

Latest research

Each year Rainmaker researches hundreds of super funds and master trusts to learn more about what are the latest extras they are offering. In 2008 they found, from a survey ofalmost 290 funds that super funds now offer a median 16 extra benefits, almost double the results from the 2003 survey. 

What is unchanged from previous surveys is that while there is no noticeable difference between industry funds and master trusts, as the very best in each segment are head and shoulders above the medians in their group.

The good news for members of public sector funds is that government funds have now caught up and offering service ranges now as wide ranging as their industry fund and master trust peers.

There was also no difference for public offer versus non public funds, which means all fund types are responding to consumer pressures regardless of whether they play in the open markets or not.

Indeed, with super choice allowing people to swap super funds almost as often as they want, non-public offer super funds have arguably the most to lose by not competing hard because if they lose members it's almost impossible to replace them.

The research also found that the best industry funds and master trusts offered up to 26 extra benefits and services, while the best government funds only offered up to 20.

The most common extra super fund benefits are having a website as just about all funds are now available online, having a call centre (98 per cent), offering online account access (94 per cent), having death/TPD insurance (92 per cent), having death only insurance (85 per cent). 

Eighty-five per cent of funds were found to have retirement income stream pensions, 78 per cent were found to now offer financial advice and 75 per cent were found to be able to handle EFT transaction - which is great news for employers. 

This shift to extra services is so powerful that many people now think that many people now think they are just normal things you should be able to get from your fund. But even just a few years ago these extras were surprisingly very uncommon. For example, just five years only 10 per cent of funds offered EFT transactions.

So don't be surprised if your fund soon starts offering you mobile phone based services or it begins to let you access to your retirement account directly from a local ATM machine because the smartest and best funds are already planning how to roll out these services.

Extra Benefits per Segment

Source: Rainmaker Information

Funds, mini-institutions and products

While there are only slight differences between the extra services offered by the different segments, industry funds are much more likely to offer products like home loans, personal loans and credit cards through the fund.

This, at first glance, suggests a powerful advantage for industry funds. But does it really? By this we mean it may be because industry funds are largely independent “silos” where the fund is the predominant legal entity around which everything is based.

On the other hand, master trusts because they are usually only a small part of much wider ranging wealth management groups that already offer all these other services, will give you access to these services but won't actually directly integrate them into the master trust itself.
 
This is why not-for-profit funds are raelly like mini financial institutions compared to retail super funds such as master trusts that are really just one branch of what is available from the overall wealth management group which consumers access through their financial adviser. Comparing super funds to master trusts too simplistically therefore sometimes misses the point of how master trusts really operate.

Fastest growing extra benefits The rush by super funds to offer extra services means that some services have quickly become very popular. Reflecting this, the graph illustrates that while change is being seen in just about extra extra benefit category, some are growing slowly and some are surging. Progressive super funds are even looking to offer more fringe benefits and this is why it's the 'second tier' of extra benefits where the real changes are being seen.  For example, going public (not needing an employer to get you into the fund), the availability of spouse accounts, letting members invest in shares directly, offering non-super investments, making EFT transactions available to employers, offering allocated pensions, offering more sophisticated investment choice, providing better and more regular investment updates and reports, and providing access to financial planning are the hot new services. In this context, the spectacular failure of extras like children's super accounts or the very low level of shopping discounts being available through super funds should not go unnoticed. Similarly the reduction in funds offering credit card access to their members. The only downside to this race for extra services is funds have to guard against adding features for their own sake, or adding high cost features unlikely to attract member interest. A good example was a few years ago when several funds started offering rebates on the purchase price of new cars but they quickly withdrew these services after they turned out to have almost no take-up.  Reflecting these developments, it may not be too surprising that the leading funds almost match each other in the number of extra benefits they offer, meaning that the best funds offer so many extra benefits that even calling them “super funds” no longer makes sense. Conversely, funds not offering lost interest in you and it might be time to look for a new super fund.

Most Common Extra Benefits 2004, 2006 and 2008     Source: Rainmaker Information

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