At least 6 MILLION Australians have more than one superannuation fund.
Recently I met an Australian client and like many of my new clients, he had multiple superannuation funds in Australia. We sat down together and I asked him to send me his latest superannuation statements from all FIVE of his super funds. From these statements we quickly discovered that he was being charged thousands every year in excess fees.
After reviewing each of his funds and the costs and benefits of rolling funds out of / into each, we found the right fund and investment strategy for him. We were able to slash his fees by over 50% each year and that saving will make a substantial difference over time. To put this into perspective, the annual savings alone will add an additional $170,000 to the super balance in 20 years’ time.
While this is a substantial saving, there are many other reasons to look at consolidating your superannuation funds into the right fund for you:
1. Saving Duplicate Costs
Many super funds have administrative costs for each super fund and they can quickly add up, particularly on smaller balances. By having your super invested through one fund, you can eradicate any duplicate administrative costs.
2. Easy to Track Your Super
When was the last time you logged in to check your super balance and performance? How has your super performed relative to your benchmarks? By consolidating your super and tracking your investments, you will find it much easier to manage.
3. Reduce the Paperwork Burden
We are constantly bombarded with unnecessary paperwork, whether in the mail or electronically. By consolidating your super, you can put an end to any unnecessary paperwork and updates from your multiple super funds.
4. Align Your Super to Your Risk Profile
Most people would consider themselves Aggressive investors while markets are rising, however it’s only when markets turn that we discover our true risk appetite. It’s important that your overall super balance is invested in alignment with your financial goals and risk profile.
But wait…before you look to roll all of your super into one fund, you need to be careful to check the following:
- Is your super fund a Defined Benefits scheme and will you lose these benefits if you shift?
- Will you lose insurance benefits if you cancel one fund to rollover to another?
- If you did cancel your insurance inside super, could you get new cover at the level that you need?
- Are there any termination fees that you need to be aware of?
- Can your employer contribute to the fund that you choose? (Particularly important if you plan to work in Australia again)
According to the Association of Superannuation Funds of Australia, the top reason that people haven’t consolidated their super is because they just haven’t gotten around to it. Thankfully, that’s where our strategic advice can be helpful, to guide you through the pros and cons and walk you through the process.
Book a complimentary consultation to discuss how we can help to review and consolidate your super: http://bit.ly/Book-Your-Consultation
To Your Financial Success!
Jarrad Brown is the trusted fee-based financial advice provider for Australian expatriates living in Singapore and throughout Asia-Pacific.
To learn more about how we may be able to help you, please contact us:
✆ +65 8282 5702