What Super Are You with?

sparekh on 04/07/2020 - 18:59
Last edited 06/07/2020 - 15:04 by 1 other user

I have been with Commonwealth bank essential super since the start. That was what decided to go with without giving it much thought as I was banking with Commonwealth bank already.

Recently I had been reading Barefoot investor book and realised that there are investment and admin fees. I knew about admin fee but didn't know about investment fees.

I am currently paying:
0.40% pa investment fee
0.35% pa admin fees + $70 fixed fee

Barefoot recommends hostplus index balanced fund which is definitely cheaper.

Is there anything you would consider apart from fees?

Financial Superannuation

Comments

  • dcep on 04/07/2020 - 19:03
    +3

    performance

    risk profile / fund allocations

    insurance

    • sparekh on 04/07/2020 - 19:08

      Thanks

  • djones145 on 04/07/2020 - 19:04
    -3

    L7

    • sparekh on 04/07/2020 - 19:07

      What's L7?

      • djones145 on 04/07/2020 - 21:42

        watch free to air TV
        you will understand

        use ur hand to make a L and other hand a 7

        join together

      • fantombloo on 04/07/2020 - 23:06
        +1

        Pretend we're dead.

    • D C on 05/07/2020 - 11:28

      Far out man, my granddad used to call people that.

  • DingoBilly on 04/07/2020 - 19:18
    +2

    I did my own analysis and found that the AusSuper indexed fund seemed to be the best mix of performance and price.

    Hostplus is cheapest for sure, but performance is pretty lacklustre overall.

    • plmko on 04/07/2020 - 19:46
      -6

      Hostplus & AusSuper are the cheapest and for the performance but COVID19 revealed them for what they are, they are risky and risk = reward.

      IMO the performance is irrelevant if you are taking on industry risk that can dry up activity overnight.

  • canyoudoitcheaper on 04/07/2020 - 19:18
    +1

    Generally I've been advised to avoid retail funds like bank owned super funds, AMP, etc.
    I've been with an industry fund for a few years that charges $52/y admin and 0.27% investment fee.

  • Ghost47 on 04/07/2020 - 19:34
    +4

    I would not go with a bank at all for super funds. I've been with REST since I worked in a supermarket a while ago.

    Apart from fees I would consider:

    • Ability to tailor/fine-tune my portfolio to how I prefer, e.g. SunSuper allow you to now invest in low-cost Vanguard ETFs IIRC.
    • Insurance premium costs. Everyone should check on their insurance costs with their super and adjust them based on their situation as insurance premiums can erode returns.
    • Maybe track record? History?

    Honestly, most industry funds are quite good. Australian Super has done pretty well the past few years, they're probably still number 1 in terms of returns. REST used to do quite well with their Core Strategy portfolio back in like, 2010 or something but they've dropped the ball a bit as they've allocated more assets to defensive stocks because they were expecting a recession in Australia (they mentioned this in an AGM or something).

    If I had to choose one I'd go Aus Super.

  • brokenglish on 04/07/2020 - 19:38
    +1

    I am also with Essential Super since CBA is my main.
    Where did you get your fee numbers?
    I checked my transaction history, the only negatives I got are admin fees which are $5 per month ($60 pa).

    I've never seen those investment fees, are they hidden somewhere? When are you charged with investment fee?

    I heard industry funds are better, but it doesn't make sense to me:
    HostPlus is $1.50 pw ($78 pa)
    AustralianSuper is $2.25 pw ($117 pa)
    That's why I'm still with Essential Super.

    Would someone with more experience kindly enlighten me? Are the returns gained from industry funds alleviate the admin fee difference?

    • garetz on 04/07/2020 - 19:46
      +2

      investment fees come off your earnings, so if you earn 2k in the financial year, and your investment fees are $500, you will effectively have $1500 added to your super. Its not listed as a fee, its taken out of the earnings as an expense.

    • canyoudoitcheaper on 04/07/2020 - 19:52
      +4

      The 0.75% asset based fee for Essential Super is listed on their website:
      https://www.commbank.com.au/super-retiring/essential-super.h…

      The issue with retail funds is that they do not have an independent trustee that looks out for members. For example, AMP Super would only put money in AMP investment products, even though they performed worse than other products. A lot of bank owned funds have massive conflict of interest issues that were uncovered in the Royal Commission.

    • sparekh on 04/07/2020 - 20:11

      To get the fees and all, you search in Google for "your fund + PDS".

      For essential super :
      https://www.google.com/search?q=essential+super+%2Bpds&oq=es…

      Of course, the product site would list it too, but Google search is quicker if you know your product.

      PDS is product disclosure statement.

  • WoodYouLikeSomeCash on 04/07/2020 - 20:09

    “We’re all in this together…”

  • [Deactivated] on 04/07/2020 - 20:50
    -1

    They are all BS.

    • CommanderCrumbcake on 04/07/2020 - 21:28

      Would you mind enlightening us with what isn’t BS then?

      • [Deactivated] on 04/07/2020 - 22:04
        +1

        Fat stacks

      • poboy on 05/07/2020 - 09:16

        The government should offer a base fund that acts as a minimum standard. The industry has a lot of waste and lobbyists who want the status quo maintained. I can dig out the stats, but from memory we're all being diddled about 3-5% a year.

  • cloudy on 04/07/2020 - 21:50

    Host is cheapest, and I use the choose my own investment option. Like literally pick my own stocks.

    The problem with the advice people give are, how do you know what is a good risk reward? Can you tell just by looking at last performance? How do you know luck or process produced the result?

    In terms of insurance, do you know exactly what is covered for the price of each fund?

    My point is it’s all too hard, it’s usually a in fund we trust approach. So I’d just go with low fees if you can’t be fully informed, which I argue most people can not.

  • Traya1 on 04/07/2020 - 22:45
    +8

    Australian Ethical Investments

    Very high performance, relatively low fees for an ethical super option.

    I'm not even that ethically minded, I just can't stand seeing bluechip dinosaurs like BHP and Woodside in the top 10 holdings, much rather capital light growth companies that are actually growing. I think as people wake up to climate change and the impacts of primary industries you can get real out-performance by avoiding those companies that will be hit with taxes etc.

    • bogan on 05/07/2020 - 02:04
      +5

      Or Future Super. If you want to accelerate Australia's switch over to renewables vote with your dollars.

      • Traya1 on 05/07/2020 - 21:07
        +1

        Love FutureSuper but their fees are so much higher than Australian Ethical. I might look at them when they are a bigger fund with more assets under management and can hopefully drop fees a bit more. I got a mate at Uni with a balance under $5k onto them though because afaik under $6k with FutureSuper is fee exempt which is awesome :)

  • Trying2SaveABuck on 05/07/2020 - 01:42

    Hostplus

    Was with HESTA but Hostplus is cheaper

    • Flowerbomb on 05/07/2020 - 09:06

      Do you recommend balanced or conservative given the current climate and for a younger person? I recently switched to the conservative option.

      • conan2000 on 05/07/2020 - 10:02
        +1

        Not sure if it's an option with all funds, but mine allows me to mix the options. I.e. I can do 30% balanced/30% conservative/30% high growth/10% cash. I took almost no hit to my super balance during COVID with a mix something along these lines.

        • Flowerbomb on 05/07/2020 - 10:10

          Great tip! Thanks. Your risk is diversified. I know a couple of family friends that have lost >100k in their super, and they forgot to manage their accounts on the onset of the pandemic.

          • conan2000 on 05/07/2020 - 16:59

            @Flowerbomb: Yeah, it fluctuated a few thousand on a balance of $120-130k, but recovered fairly quickly. My partner's dropped from about $100k to $80k, and hasn't come back up much.

            It will vary significantly by fund as well. The year-on-year performance of the fund I am with showed the lower risk investments were actually returning more than the higher risk ones pretty much without fail over the last decade. So I wouldn't always assume that higher risk = higher reward.

          • brad1-8tsi on 06/07/2020 - 10:44

            @Flowerbomb: You haven't lost it until you cash out.

      • Trying2SaveABuck on 05/07/2020 - 11:28

        Im balanced but i have considered high growth becuz im only 30 however it would depends on your age and situation

        it also depends on how much $$ you got in ur super

  • snooksy on 05/07/2020 - 09:53
    +1

    You need to look at fees in combination with performance. If the index fund gets 7% and the other fund gets 10% Performance per annum and it only costs 1% more in Fees for the other fund then you are still 2% ahead with the other fund. Index funds will always be cheaper but they are passive so go with the market. You will never beat the market with a passive fund. An active fund has a chance of beating the market but might go worse than the market, it depends of who is running it and what it’s history is like in times of market volatility. The other thing with Super funds is index funds don’t directly invest in infrastructure whereas the managed super funds hold assets directly In Unlisted assets such as such as ports, airports, construction projects Which you won’t get access to if you stick with their index funds. I haven’t read the barefoot investor Cover to cover so I don’t know if it goes into this detail however some more food for thought. Personally I’m with Australian Super where I actively manage the investments every quarter. My advice would be to get out of the retail fund and into a not for profit industry fund Super provider. I also have separate share holdings. It pays to keep an eye on your investments. Good on you for taking an interest.

  • Ashbargin on 05/07/2020 - 10:43
    +1

    Just be mindful when looking at the investment fees for many of the industry fund options. As an example if you read the Cbus PDS you would be lead to believe the fees for the MySuper option if 0.65% investment fee + 0.19% admin + $104 pa. You need to dig into a seperate document to also understand that there are additional borrowing and property costs of 0.33%.
    This almost doubles the fee paid and most would never know.
    I am not really sure why this continues to be legal. It really appears to me to be misleading.

    Most industry funds really are lot more expensive than many of the newer wrap arrangements offered.

  • stokedninja on 05/07/2020 - 14:29

    Colonial first state firstchoice wholesale.

    Sector specific index funds x 5.

    Total fees around 0.35%

  • [Deactivated] on 05/07/2020 - 21:01
    +1

    Hostplus, but beware the barefoot index balanced option it’s got around 25% cash / fixed income allocation. I replicated the index balanced with a mix of it’s IFM aus equities, hedged and unhedged intl equities but with a very small fixed income allocation as I’m not close to retirement. Very easy to do on their portal. Chances of an active consistently outperforming an index over 30 odd years aren’t great - not that it can’t happen but barefoot examples are good in showing the impact of higher fees over time it’s staggering. With an index fund you’re guaranteed close to the performance of the index for very little in fees, actives can outperform their index benchmark but check the performance fees some collect when they do. Not all index funds are the same always read the pds especially with regards to fees and what you’re investing in.

  • ham12 on 05/07/2020 - 22:48

    Vision super - Innovation and disruption.

    Pretty good performance..

  • brad1-8tsi on 06/07/2020 - 10:17

    First State Super.
    I know it isn't the cheapest or best performer but it's Top 10 (maybe). I'm quite happy to listen to anyone that can show me a significant saving somewhere else with equal or better performance.

    Admin Fee $52
    Asset Based Admin Fee: 0.15% of balance with a $750 maximum.(at $500k balance you hit the cap).

    My investements and fees:
    20% Growth 0.8%
    25% Australian Equities 0.09%
    35% International Equities 0.09%
    20% Diversified Socially Responsible 0.59%

    This gives me Asset Classes of:
    48.4% International Equities
    32.7% Australian Equities
    5.3% Fixed Income
    3.8% Cash
    2.7% Property
    2.8% Infrastructure / Direct Assets
    2.0% Private Equity
    1.7% Credit Income
    0.6% Other "Alternatives"

    I find targeting the equities offering pulls the fees back a lot and the Growth / diversified Social adds property, cash, bonds for a small safety net.

  • nishakhurana on 06/07/2020 - 16:02

    Interesting

  • drprox on 07/07/2020 - 21:50

    Sunsuper, directly in the indexes available (known to be vanguard). All up approx 0.21% + $80pa

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