Superannuation is simply a tax structure. You can generally invest in the same financial instruments through a super fund as you can invest in directly. It’s just that the income and the capital gains are taxed at lower rates than in other investment structures.
Not quite as super as you’re led to believe
Superannuation investors fall into two categories, those who manage their own super fund and those with a super fund administered by an employer.
In each case there are several factors which contribute to below-par performance or make it difficult for investors to know what their real returns are.
Employer Organised/Sponsored Super
Investment performance is often only average or below average.
Investment performance is rarely reported against a benchmark.
Most members do not know how well their investments are performing.
Fees vary considerably.
Investment menus are not representative of professional advisor preferred options.
DIY – Self Managed Super Funds
Investment performance varies with the widely different participants.
Investment performance assessment is either not undertaken at all, or not done accurately because it excludes income from overall portfolio assessment.
The investor often makes decisions alone with no sounding board, and behavioural issues can arise.
In our experience, superannuation investors - in both categories - rarely earn as much from their super as they should. Find out why, for most investors, it’s a case of Not So Many Happy Returns.
A PortfoliOK review will analyse your super fund and rate its performance against a real-world benchmark.
