GETTING STARTED IN SUPER
If you need to choose a MySuper product or super fund, either for yourself, a friend, colleague or relative, this step by step guide will walk you through what you need to do.
Getting Started Checklist
Step 1 - Know what you want
If you've ever tried to chose a phone plan, bought a car, a house, or tried to choose a school you would have quickly learnt that not all phone plans, cars, houses or schools are the same.
Let's use the example of buying a car. Remember when you were last in a car dealer showroom. What were those questions the sales rep asked you? Were they something like: what type of driving do you do, how fast do you want to go, do you need to carry luggage, do you have kids, is fuel consumption a factor, do you want to go off-road, what type of finish and decor do you want, do you have a budget?
Did you notice that as soon as they asked you these questions they were immediately able to steer you to some cars that seemed to miraculously fit the bill? Choosing a MySuper product or super fund is the same, it's just that the sharp-shooting questions are different.
Do you want a simple easy-to-understand fund or something more complex? Do you want lots of investment choices? Do you want the fund to make
the investment decisions or do you want to? Do you want the fund to consider environmental factors about the companies it invests in, do you want to invest in technology, exclude tobacco companies, do you want to know what your fund is actually investing in?
Do you want insurance, what type and how much? Do you want to be able to access your account on your mobile device? Do you want advice with that or do you want to talk to a financial adviser? Do you want to be able to bundle extras like home loans, health insurance or shopping discounts?
These questions matter because the more features you want, the higher the price in fees and the higher your superannuation fund's investment returns need to be to cover the fees.
Put another way, if you want lots of involvement with your super fund and you want it to be flexible then look for funds with lots of investment and insurance choices. But be prepared to pay higher fees. If however you want low cost superannuation then look for a MySuper product that Is simple and easy to understand, meaning one with not too many choices.
Step 2 - Kick the tyres
Test out your preferred fund(s) by kicking the tyres. Check out their websites, read their official documents - mainly the Product Disclosure Statement, phone or email them, or send them a social media message to see if they respond.
Step 3 - It's all in the menu
Choosing a super fund is like choosing a music or video streaming service. What separates them is the range of choices they offer. So check out the investment choice menu and try to understand what it offers. The questions you should be asking are: how many choices does it have, what asset sectors, are they strategic choices, are they asset class choices, which investment managers do they use?
Step 4 - Check out the AAA rated funds
What is your fund's quality assessment rating?
Step 5 - Road test
Just like how you can't seriously check out a car without sooner or later getting behind the wheel and taking it for a test drive, the same is true with a MySuper product or super fund.
Start by checking how the fund's investment performance stacks up especially for the flagship MySuper option or the balanced and growth options. Make sure these investment returns are after fees. Then check the fund's insurance policy and find out what annual premium you will be paying.
Step 6 - Ask questions
If you've narrowed your choices down to two funds you now want to compare in detail, why not ask the SelectingSuper team to produce a Member Report Card for you? Don't forget that you can also email a question to us here at email@example.com.
- Is it easy to understand and has a good website or app?
- The investment option(s) you want to join have investment performances that are at least around or above average over 3 and/or 5 years?
- Its fees are less than 1.3%?
- It offers the insurance you want? If you don't want insurance can you easily turn it off
SHOULD YOU JOIN YOUR FUND ONLINE?
It's now possible to join most super funds online. But just because you can do this doesn't mean you should.
Remember that you might be in your super fund for decades, so joining a fund solely because you could do it in less than 60 seconds with only two mouse clicks might not be the smartest move. You still have to do all the checks - like understand who's running it, does it achieve good investment returns, are its fees and insurance good value? But if you've done these checks and you still want to join online, go ahead - making sure of course that you trust the identity protections and online security.