Wide choice of super

THE amount of investment choice offered by superannuation funds is highly varied, a report by research house InTech has found.

While 90 per cent of retail funds (eg AMP and Perpetual) offer investment choice, the figure falls to 50 per cent for industry funds (eg Westscheme and HESTA) and just 15 per cent for corporate funds.

In most of these cases, the number of investment choices is five or less.

In contrast, master funds (eg Asgard and Navigator) offer much greater investment choice.

Intech quoted a survey by Chant West Financial Services, which found that 10 leading master funds offer an average of 34 investment options.

These comprise 16 diversified investment options (eg conservative growth, high growth) and 18 single sector investment options (eg Australian shares, listed property, etc).

While investment choice has become more common, many super fund members do not exercise their right to choose how their money is invested. Instead, their money goes to the default investment option.

The Government Employees Superannuation Board undertook a major member education program after it introduced investment choice last year.

The program achieved high awareness of investment choice, nevertheless 90 per cent of members remained in the balanced default option.

Despite the slow uptake, GESB’s Peter Farrell said the rate of adoption was above the industry average and he is now seeing a slow but increasing trend of members making active choices.

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