I've recently accepted a job within the Superannuation sector. While this is great news, it does mean I have a conflict of interest and am not able to continue writing this blog.
I hope you've found the posts useful, and I suspect they'll continue to be relevant for some time to come. While costs have fallen gradually, there are still plenty of overpriced products out there and over the two years since I started, I have seen very few "game changing" products. For now, I'm grateful for the iterative improvements we have seen and I hope to see further improvements, particularly in terms of low-cost advice.
Some parting suggestions:
1) Costs matter: Keeping costs of investment low means we keep more of the returns
2) If you pay more, know what you are getting: Sometimes there may be value in paying for an asset class or segment you cannot cheaply access (for example, unlisted property and infrastructure). But if you go down that path, make sure you understand the benefit in terms of your portfolio - if your expensive actively managed Global Share manager ends up buying you largely the same international shares as Vanguard would then you are paying too much but getting little in return, impacting directly on your income and lifestyle in retirement.
3) It's not too late: Percentage fees matter more when you have a bigger balance. So even if your Super has been held back by high fees in the past, there is still time to take advantage of the low-cost options now available.
Sunday 20 September 2015
Thursday 17 September 2015
Quick Spotlight on First State Super
I've been meaning to write a quick post on First State Super having recently noticed their extremely low cost asset class choices. A reader recently wrote asking about them, so here it is!
Their fees for the various diversified options are consistent with other industry funds and are more actively managed (keep in mind they add 0.15% p.a. as part of their administration fee). But their Australian Equities, International Equities, Australian Fixed Interest and International Fixed Interest options are all managed by Vanguard and cost 0.05% - 0.15% p.a. (adding that 0.15% p.a. in administration fees brings it up to 0.20% - 0.30% p.a. in total % fees).
This provides another option for constructing your own asset allocation within Super.
Always remember to check your insurance needs and costs before switching, though. I note that First State Super's Personal plan (i.e. if your employer doesn't automatically put you with them) does not appear to auto-approve Life and TPD Insurance, so if you want insurance from them be careful to make sure any existing insurance is kept until your new insurance is approved.
First State Super:
Fees and Costs
Who Manages Your Super
Also a quick note to remind you that many super finds have recently updated their investment costs to reflect the year to June 2015 (or will do so soon). There are mostly small changes with the couple of old favourites I checked but I do note that the HostPlus Indexed Balanced fund was down to 0.03% p.a. in fees last financial year. Such value!
Their fees for the various diversified options are consistent with other industry funds and are more actively managed (keep in mind they add 0.15% p.a. as part of their administration fee). But their Australian Equities, International Equities, Australian Fixed Interest and International Fixed Interest options are all managed by Vanguard and cost 0.05% - 0.15% p.a. (adding that 0.15% p.a. in administration fees brings it up to 0.20% - 0.30% p.a. in total % fees).
This provides another option for constructing your own asset allocation within Super.
Always remember to check your insurance needs and costs before switching, though. I note that First State Super's Personal plan (i.e. if your employer doesn't automatically put you with them) does not appear to auto-approve Life and TPD Insurance, so if you want insurance from them be careful to make sure any existing insurance is kept until your new insurance is approved.
First State Super:
Fees and Costs
Who Manages Your Super
Also a quick note to remind you that many super finds have recently updated their investment costs to reflect the year to June 2015 (or will do so soon). There are mostly small changes with the couple of old favourites I checked but I do note that the HostPlus Indexed Balanced fund was down to 0.03% p.a. in fees last financial year. Such value!
Subscribe to:
Posts (Atom)