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
||Step 2 - Kick the tyres
||Step 3 - It's all in the menu
||Step 4 - Check out the AAA rated funds
||Step 5 - Road test
||Step 6 - Ask questions
Step 1 - Know what you want
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 the price the higher your superannuation fund's investment returns need to be to cover the fee costs and build up your retirement savings.
Put another way, if you want lots of involvement wit your super fund and you want it to be flexible then look for funds with lots of investment and insurance choices and be prepared to pay higher fees. But if you want low cost superannuation then look for a MySuper product or fund with a small number of easy to understand 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, and call or email them 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 does the fund 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 main flagship options like the MySuperoption or the balanced and growth option. Make sure these investment returns are after fees. Then check how good is the insurance policy that comes with the fund.
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 firstname.lastname@example.org.
|Should you join an app-only online fund?
If you're starting out in superannuation and looking for your first super fund, you can relax because you have decades of superannuation savings and investment returns ahead of you. Now is the time to get the basics right.
An easy way to do this is to join a fund online and because just about every super fund is now available online this is not the big deal it once was. But just because a fund is online doesn't make it a good fund.
Your fund, be it an online one or not, still needs good people running it. It has to have reliable investments, good insurance and fair priced fees. Great websites and apps are just great websites and apps.
If you are confident about these aspects of the fund then of course join it online making sure you trust the identity protections and online security.