Are all super funds the same?

Have you ever wondered how your super fund compares? Perhaps you have questions surrounding how your money is invested in your super fund? The purpose of this article is to provide some insight into what super funds really do with your savings and to also break through some of the marketing noise I often hear associated with certain industry groups.

I have attempted to keep this as brief as possible and opted to focus on how your money is invested as I will be completing a separate insurance inside super article shortly.

What does the name on your statement really mean?

One of the most common questions I get asked is ‘what is the best super fund’?

This is not a straightforward question and will always require some further information. Think of this question:  What is the best car for you? One would need to consider some other questions to answer this. What is the main purpose of the car? How many people will need to travel in the car? Do you go on long trips or just short visits to the shops? How much would you be willing to spend on the car?

People often concentrate too much on the name of the super fund rather than the most important features such as the underlying investments and more specifically, the asset allocation. A very important thing to remember with super is that the company’s name at the top of your statement is administrator of your super. The administrator’s main purpose is to maintain the day-to-day administration of the fund and complete audits and annual tax returns. Each fund offers a range of different investment options and an important note is that not all administrators directly manage your money. Some will have their own investment arm and offer own branded investments while others opt to include or are forced to outsource to other companies.

How is your money invested?

What a lot of people talk about with super is returns. At the end of the day this is very important but it’s critical to firstly, take a step back to see how your money is actually invested to be able to generate returns.

Each super fund will offer different investment options which are often in “risk classes”. This simply means how much of your money will be invested in growth assets such as shares or property.

In Financial Planning we work on a scale ranging from 0% Growth through to 100% Growth. There is no right or wrong option but it is very important to consider:

  1. What your goals are for your money
  2. What timeframe you will be investing your money and
  3. How different assets will perform through different market conditions

This is usually considered the key to any type of investing which is why you should speak with someone about what may be right for you.

Here’s an example:

  • Client 1 has a super fund (let’s call it AAA Super) which is invested 100% in Growth assets.
  • Client 2 has a super fund (again, we will call it BBB Super) which is 100% invested in Cash.

Over a 10 year period, one would expect that client 1’s returns would be approx. 3-4% higher (based on historical averages) than Client 2. If however Client 1 were to say that AAA Super is a better fund than BBB Super would be incorrect. If you were comparing two funds with the same investment style and asset allocation then comparisons could be made. If you are comparing completely different asset classes than it’s like saying a Ferrari is a superior car than a Ford Focus.

Know what investment features and benefits your fund offers

Some features that can be offered by different super funds can include:

  • A handful of investment choices or many hundreds
  • Index or Passive Investment options
  • Actively managed investments
  • Direct equity investments
  • Family discounts
  • Multiple policy discounts
  • Capital Guaranteed products

A rule of thumb is, if a product offers more features or benefits, than it will come with some added costs. Our job as financial planners is to determine if the extra features (and costs) are relevant or worthwhile for our clients. Some clients are happy to pay the extra costs because they feel the added features may improve their chances of reaching goals while other clients a strongly guided by costs. My general advice is: don’t assume that the cheapest is the best and if you wish to choose the cheapest option with anything in life, just ensure you know what you may be missing out on.


Now that I have run through some of the other characteristics of super funds, fees should be quite self explanatory. When certain funds advertise as being low fee funds, they quite often are also low feature funds. Again, there is no right or wrong, but just remember, if you are paying more in fees, what are you getting for the extra costs? Is it beneficial to your situation? If you are paying less in fees, are you getting everything you need from the fund? Are you certain there isn’t something important that you are missing out on?

Before you act

If someone ever tells you that they are with a certain super fund and that you should join that fund too, firstly, just take a step back and ask; is my personal situation exactly the same as that person? Does that person know everything about me and what I’m trying to achieve to provide me with that advice? Have they fully considered my situation before telling me I should change?

For most people, these answers will be ‘no’ which should prompt you to seek financial advice to ensure you make correct decisions for your personal situation.

Ryan O’Grady
Financial Planner

Authorised Representative, AMP Financial Planning

This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. If you decide to purchase or vary a financial product, your financial adviser, AMP Financial Planning Pty Limited and other companies within the AMP Group may receive fees and other benefits. The fees will be a dollar amount and/or a percentage of either the premium you pay or the value of your investment. Please contact us if you want more information.’

Scroll to Top