What type of super fund is best for me? It’s a question I’m often asked. And the answer is: it depends.
The main types are industry funds, wrap platforms and self-managed super funds (SMSFs). Each has its place, depending on your goals, involvement and what you value most.
Industry funds are marketed as low-fee options, with low admin fees but still charge investment and transaction fees. Investment options are restricted. Participants in a ‘balanced’ portfolio possess identical underlying assets. These selections cannot be tailored to individual preferences.
Wrap platforms offer greater investment flexibility. Admin fees are higher but you can choose from a wide range of investments and tailor your portfolio to suit. If you already hold property or shares, this flexibility can help manage overall exposure.
For $500,000 in a balanced option, an industry fund will earn about $3200 per annum, while a wrap platform will earn about $3400 per annum. That’s a difference of just $200 per year. Always check total fees. Don’t assume.
SMSFs offer the highest control but come with more responsibility. You manage the investments, tax and admin and must ensure compliance.
You will need an accountant for returns and audits, plus sufficient capital to start. They can be excellent but only if you are informed and prepared for the responsibilities. Which one is best depends on your goals. A qualified adviser can help you choose.
Mandy Newman, Director, AJN Financial, 15/13 Poinciana Avenue, Tewantin, 5430 6631, ajnfinancial.com.au
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