How to choose a superannuation fund

The vast majority of workers have the freedom to choose their own super fund, and it’s definitely something worth doing. It will help you keep track of your super and it might be an appropriate way to fund a low cost life insurance strategy that has been tailored to meet your needs.

How to choose a super fund

Your super fund plays an important role in building financial security. It’s money that will support you in retirement, and while you cannot normally access your super while you’re in the workforce, there is still plenty you can do to grow your nest egg for the future.

A key step is choosing your own super fund.

Why choose your fund?

Most people receive super contributions from their employer – and this money can either be paid into a fund you nominate or a super fund chosen by your boss.

There are good reasons to select your own fund.

Choosing your own fund makes it easier to keep track of your super throughout your working life. If you change jobs you can take your super with you, without losing any of your super along the way.

Relying on your employer to choose a super fund makes it unlikely your fund will meet your needs. By nominating your own fund you have control over the underlying investments, the fees you pay, your insurance coverage, and your choice of other services available to fund members.

What are the main options?

Super funds can either be professionally managed or you can choose to run your own self-managed super fund (SMSF).

For most people it’s simply easier to invest their super in a professionally managed fund. Choose from an industry fund, which typically focuses on a particular sector such as hospitality or construction; or select a retail fund, run by one of the large financial institutions.

How to compare funds

There are a number of factors to weigh up when it comes to selecting the super fund that is right for you. This is an area where your FinChoice financial adviser can help. We will walk you through the main qualities of a variety of funds to help you choose the one that best suits your needs.

Things to consider when choosing a super fund

Investment options

The way your super is invested will impact the returns your money earns. Some funds offer a greater choice of investment options, and this is important if you have very definite ideas about how you want your super invested.

 Level of insurance cover 

Your super fund can be a source of low-cost life insurance. Your financial adviser can review the cover provided by a variety of funds to be sure you have adequate protection.

Will it work with your work?

Confirm that your employer can contribute to your chosen fund. If your job is governed by say, a workplace agreement, it may specify the fund or funds into which payments must be made by your employer.

Competitive fees

All super funds charge ongoing fees. While it is important to minimise these fees, you also need to be mindful of what you are getting for your money.

Track record

Past returns are no guide for the future so it doesn’t pay to look at last year’s winner. We can help you identify funds that have consistently performed well.

Member services

Super funds may offer a variety of additional benefits to members such as discounts on different products and services. These shouldn’t be the main game when selecting a fund but they can be a welcome extra.

Changing super funds

If you’re already in a fund or you have multiple super balances, we can help you roll your super savings into the single fund of your choosing. It can help you save on fees and prevent doubling up on insurance premiums.

It’s also a smart way to keep better track of your super throughout your career.