Retirement
3 best and worst super funds revealed
Members are paying almost $35 billion in superannuation fees every year, according to a new report which has named the best and worst-performing funds.
3 best and worst super funds revealed
Members are paying almost $35 billion in superannuation fees every year, according to a new report which has named the best and worst-performing funds.
Stockspots 2020 Fat Cat Funds report has stated that poor performance is largely due to higher fees, with CEO Chris Brycki highlighting to consumers they would be $200,000 better off if they are in a fund charging less than 1 per cent instead of paying 2 per cent.
“One of the golden rules of superannuation is: the less you pay, the more you get. Always pay less than 1 per cent p.a. in fees so your super isn’t eroded by high fees,” Mr Brycki advised consumers.
“Unfortunately, there are almost twice as many high-fee funds (more than 1 per cent p.a. in fees) than low-fee funds (less than 1 per cent p.a. in fees).”
Mr Brycki noted that people can be reticent to change, and even when they know they’re in a Fat Cat Fund prefer to turn a blind eye than spend the 10 minutes required to save themselves serious cash in the future.
“Sadly, in the eight years of naming the worst-performing Fat Cat Funds, few people have moved out of these funds.
“Retirement may seem a while away, but when you get there and realise you could have been $200,000 richer, it won’t be a good feeling.”
The Fat Cats
A superannuation fund is classified as a Fat Cat Fund if they are in the bottom 10 performing super funds within a particular risk group over five years.
The results showed AMP, OnePath and Macquarie are the three worst-performing funds for 2020.
“$5.5 billion of Aussies’ superannuation is sitting in the worst 40 Fat Cat Funds, costing them over $117 million in fees every year. A typical Fat Cat Fund charges 2.13 per cent in fees versus a Fit Cat Fund, which charges 0.97 per cent,” Mr Brycki said.
AMP has been a Fat Cat for eight years in a row, and in 2019 had approximately 1.5 million member accounts, according to ASIC.
AMP also made history by being the first Fat Cat Fund to have a super fund that delivered a negative return over five years, with one of their options delivering a total return of -2.2 per cent.
“The main factors that contribute to low-performing funds are a complex product suite, high fees and poor performing investment options,” Mr Brycki explained.
The Fit Cats
A superannuation fund is classified as a Fit Cat Fund if they are in the top 10 performing funds for a particular risk group over five years.
In 2020, Unisuper, who manages $80 billion of Australians’ superannuation investments, took out the Gold Fit Cat Fund award for the most top-performing funds over five years.
The silver award goes to IOOF, with four Fit Cat Funds, and the bronze award goes to Australia’s largest superannuation fund, AustralianSuper, who manages more than $160 billion for over 2 million members.
The one factor the top three Fit Cat Funds have in common is they all charge less than 1 per cent in fees per year.
RELATED ARTICLES
About the author
About the author
Superannuation
Australia's super performance test transforms investing: What's the next move?
APRA’s latest performance test has done more than name and shame lagging super options; it has rewired investment strategy, compressed fees and accelerated consolidation across the $3Read more
Superannuation
Australia's super test dilemma reform could boost long-term gains while keeping accountability sharp
APRA’s latest performance test results have reignited a structural debate: can Australia hold funds to account while still backing the nation’s long-horizon investment needs? With the government ...Read more
Superannuation
Super funds rethink strategy as APRA's performance test hits a fork in the road
The latest performance test results have reignited debate over Australia’s superannuation benchmarking regime and prompted a formal government review. Behind the headlines, boards are quietly rewiring ...Read more
Superannuation
Aware Super enhances digital tools for financial advisers, boosting efficiency and client engagement
Aware Super has unveiled a suite of new digital features designed to streamline the workflow for financial advisers and their clients. This significant upgrade includes direct data feeds to Xplan and ...Read more
Superannuation
Super funds flip the script as APRA's performance test sparks strategic overhaul
Australia’s performance test has lifted the floor on retirement outcomes—and divided the industry in the process. After early shockwaves, failure rates have fallen and fees have trended down, but ...Read more
Superannuation
Rewiring Australia’s super performance test: from compliance brake to capital engine
Can an accountability tool double as a nation-building lever? Canberra’s review of the superannuation performance test aims to preserve member protection while freeing funds to back long-dated assets ...Read more
Superannuation
Superannuation guarantee rate rises to 12 per cent as parental leave changes take effect
The superannuation guarantee rate has increased from 11.5 per cent to 12 per cent from Tuesday, with super contributions also being added to Commonwealth Parental Leave Pay for the first time. Read more
Superannuation
Rest's Sustainable Growth option achieves highest sustainability classification
Rest superannuation fund has achieved the highest sustainability classification for its Sustainable Growth investment option from the Responsible Investment Association Australasia. Read more
Superannuation
Australia's super performance test transforms investing: What's the next move?
APRA’s latest performance test has done more than name and shame lagging super options; it has rewired investment strategy, compressed fees and accelerated consolidation across the $3Read more
Superannuation
Australia's super test dilemma reform could boost long-term gains while keeping accountability sharp
APRA’s latest performance test results have reignited a structural debate: can Australia hold funds to account while still backing the nation’s long-horizon investment needs? With the government ...Read more
Superannuation
Super funds rethink strategy as APRA's performance test hits a fork in the road
The latest performance test results have reignited debate over Australia’s superannuation benchmarking regime and prompted a formal government review. Behind the headlines, boards are quietly rewiring ...Read more
Superannuation
Aware Super enhances digital tools for financial advisers, boosting efficiency and client engagement
Aware Super has unveiled a suite of new digital features designed to streamline the workflow for financial advisers and their clients. This significant upgrade includes direct data feeds to Xplan and ...Read more
Superannuation
Super funds flip the script as APRA's performance test sparks strategic overhaul
Australia’s performance test has lifted the floor on retirement outcomes—and divided the industry in the process. After early shockwaves, failure rates have fallen and fees have trended down, but ...Read more
Superannuation
Rewiring Australia’s super performance test: from compliance brake to capital engine
Can an accountability tool double as a nation-building lever? Canberra’s review of the superannuation performance test aims to preserve member protection while freeing funds to back long-dated assets ...Read more
Superannuation
Superannuation guarantee rate rises to 12 per cent as parental leave changes take effect
The superannuation guarantee rate has increased from 11.5 per cent to 12 per cent from Tuesday, with super contributions also being added to Commonwealth Parental Leave Pay for the first time. Read more
Superannuation
Rest's Sustainable Growth option achieves highest sustainability classification
Rest superannuation fund has achieved the highest sustainability classification for its Sustainable Growth investment option from the Responsible Investment Association Australasia. Read more
