POWERED BY MOMENTUM MEDIA
Funds distracted by MySuper
Superannuation funds may have focused too much on the delivery of MySuper products and forgotten the main game – members who choose their own funds, according to actuarial consultancy Rice Warner.
In an analysis published on the consultancy's website this week, consultant Nathan Bonarius suggested that super funds had been distracted by their default system obligations.
"Rice Warner believes that developing a good default option should be a key objective of every superannuation fund. However, to focus product development solely on MySuper, at the expense of Choice, has created certain commercial limitations," he wrote.
Bonarius pointed out that choice members made up the majority of assets in the superannuation industry and the average account balance for a choice members was four times that of the average MySuper member.
"A quick look at the rapid rise of self-managed superannuation funds (SMSFs), which represent one-third of total industry assets, tells us that some one-million fund members are now managing their own retirement savings, despite a general lack of investment expertise and certainly the absence of any scale benefits," he wrote adding that the industry fund sector, despite its strong brand, had attracted only 2.5 per cent of retirement assets.
However, Bonarius suggests that change is occurring and that funds are recognising the value of retaining high balance choice members via retention strategies such as expanding the range of choice investments available, member direct services, pension product transformation, and the offer of financial planning services.
Recommended for you
Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Coalition, which has pledged to reverse any changes if it wins next year’s election.
In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges.
Chant West analysis suggests super could be well placed to deliver a double-digit result by the end of the calendar year.
Specific valuation decisions made by the $88 billion fund at the beginning of the pandemic were “not adequate for the deteriorating market conditions”, according to the prudential regulator.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.56 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.06 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.81 3 y p.a(%)
