By Anthony Flapper, Matthews Steer Accountants & Advisors and Authorised Representative of Australian Unity Personal Financial Services Limited AFSL 234459.
As a financial advisor I frequently hear complaints that super is underperforming, or is a poor investment option, but the reality is that your fund’s performance is a direct result of the underlying investment held within the fund, and the performance of those assets. Understanding how and where your super is invested and the mechanics of your fund can help you maximise the performance of your super. Start your super education by asking yourself (or your fund or adviser) these four simple questions.
How are my assets allocated?
It’s critical for your future financial security that your asset allocation is aligned with your risk tolerance and risk profile so understanding the level of growth versus defensive assets in your portfolio is vital as the impact it can have over an investment timeframe can be quite considerable. Think about your investment timeframe and investment cycles and ensuring your super monies are invested in line with what you want.
Do I have the right super insurance?
According to moneysmart.gov.au more than 70%* of Australians with life insurance hold it through their super, and many super funds historically have provided you with life cover and TPD insurance. In some cases, you might have insurance in your super fund that you don’t know about. Or you may find that, as you age, the level of insurance you’ve been allocated may become disproportionally expensive. Understand the cover that you have and whether it’s sufficient for your personal circumstances, what it costs, and compare it with equivalent products outside super to find the right insurance policy for you.
What superannuation fees and charges am I paying?
All types of superannuation funds incur fees and charges and, if you have an older super product, the fee structure may be more expensive compared to more modern products that leverage technology and automation to minimise fees. Be aware of your fund’s fees and charges and be aware that there may be alternatives.
Am I taking advantage of super contribution caps?
The amount you can contribute to super in any one financial year is subject to concessional and non-concessional caps. Talk to your financial advisor about how you can maximize both your concessional ($25000 for 2021 financial year) and non-concessional ($100,000 for 2021 financial year) contributions wherever possible.
With the end of the financial year rapidly approaching there’s no better time to familiarise yourself with the products nurturing your nest egg. It could help to save you money and maximise the performance of your investment.
The information provided is of a general nature only, and doesn’t take into account your personal objectives, financial situation or needs. It does not constitute financial, investment or taxation advice, and should not be relied on as such.Before making any decisions involving financial products or services, you should read the relevant Financial Services Guide (FSG) and any applicable Product Disclosure Statement (PDS). We also recommend that you seek independent professional advice as to the suitability of the products or services which is relevant to your particular financial circumstances.