The ATO has launched its new YourSuper comparison tool! https://www.ato.gov.au/YourSuper-Comparison-Tool/ What do you think? We’re keen to hear your feedback!
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This page on the ATO website gives some background information relating to the comparison tool.
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I assume the balance shown in your account will be updated soon, but June 2020 is quite a bit out of date right now.
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It would be useful if one could enter their current super balance and use this to filter based on what is best financially/historically considering returns and fees. Smaller balances higher fees have greater impacts, while higher returns may favour larger balances. It should be reasonably easy to do a basic calculation. The calculation could be like interest rate, comparison rates for loans.
Edit…I see it does the above under the filter dropdown. This shouldn’t be under filter but displayed predominately on the screen. Having as a dropdown ‘filter’ isn’t obvious and could be overlooked by most. When first using the tool, I just thought the $50k balance was some sort of average used for indicative purposes…which is why I made the above comment. I imagine most would miss the ability to tailor make the listing based on super balance and age.
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For most people, comparing super funds is in the too hard basket because it is difficult to know if you are comparing an apple with an orange, a banana or another apple. The methods used to disclose fees can also be confusing.
Hopefully, this comparison tool will be able to improve the general understanding about choosing an appropriate fund. It should be most useful for providing a simple awareness of fees and returns for people who have taken little or no interest in their super. Also, people considering changing or consolidating funds can see details for a lot of funds all in one place.
Some tips for users
The filter allows you to input your age and current super balance and the option of excluding restricted funds from the comparison if you are not eligible to join any of those funds. As mentioned by @phb , these options should be made more obvious, rather than simply being hidden in the filter tab.
At first look the tool appear to only cover one product from each of the eighty included funds. However, some funds have details of multiple products. There are two ways to access details of different products. The first is to hit the downward pointing arrow (if showing) to the right of the ‘Select’ box for a fund, the second is to put the fund name in the ‘Find your own MySuper product’ search box.
Read all the instructions and disclaimers before acting on the outcomes provided.
The information provided by the tool is only one step in the process of selecting an appropriate fund. It would be great if there was a prominent link to the Moneysmart website to provide additional information.
Potential misleading information
Some, but not all, funds, have two categories of fees. The first is investment costs which are normally charged as a percentage of your account balance and deducted from income before the net return percentage is calculated. The second is an account or administration charge, which might be a set rate per month and deducted after the return rate is calculated.
The tool should spell out which fees have already been deducted before the return rate was calculated.
For people with a low super balance, funds with just a variable fee may seem more attractive. However, as the balance grows, they might get a different outcome a year or two later. The message is that if you use the tool, continue to review your situation in the future.
The tool doesn’t specify time periods for returns i.e. it lists an average return over the past 6 years without saying when the period starts and finishes. It would also be great to know whether the data for all funds relates to the same time period.
If you include you age, the tool will select funds considered appropriate to someone you age. However, your circumstances might for many reasons be different to others your age. If this is the case, you might like to lie about your age to get a more appropriate result.
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I winced about that also, but found when you select funds to compare it at least shows 3, 5, and 6 years growth. One has to hope they all use the same dates, but is it the calender year, financial year, or years starting from the previous month? So many questions and so few answers - although many answers seem hidden and available if you find them. I presume 6 years is because that is when they started this project’s dataset, and it will become more consistent with industry norms over the next few years, eg 3, 5, and 7 or 10 year horizons?
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Just giving return percentages and gross fees isn’t useful for me, are they making that money via slave labour, drug dealing, arms dealing, environmental destruction, or something good? How your balance increases is more important to me than the fees and gross return percentages.
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Indeed good ethical investment is important. Support of exploitation including child labour by a fund regardless of good returns to investors should not be rewarded by investing by superannuants. I would also include those who do not require good climate actions by the businesses they invest in as some who should not be invested with.
I think ethical ratings are a must including breakdown into climate, slavery (worker exploitation) and similar criteria.
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Yep, it could definitely be clearer! A lot of people missed that too.
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Great point! Ethics can also be a really important factor, so it’s important to carefully research potential funds before you choose. You can find links to our 5 part series on ethical super here: https://twitter.com/ConsumersSuper/status/1323759976297295872
We’ll also be publishing a guide on using the YourSuper tool soon - stay tuned!
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The ATO’s super comparison tool is a very positive development. The essential information is easy to access and interpret. Suggested improvements would include a greater range of performance timeframes and more use of graphical presentation.
I have been running our SMSF for quite a while and annually review performance against market Index benchmarks such as ASX200. The ATO numbers may be better benchmarks and if the SMSF is not doing as well as it should, I will move it to an industry fund. Fees transparency is also important and the ATO gives direct comparisons for our SMSF balance; otherwise it is almost impossible to do this calculation. Conclusion: generally more useful than one might expect.
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I just had a quick look. I selected four funds (including the one I use), clicked “Compare”, and lo and behold:
Investment performance Not Assessed Not Assessed Not Assessed Not Assessed
The other information was more useful, however I have never considered compulsory superannuation to be an asset, because since the beginning it has always been 100% subject to government whim under the limitations and vagaries of our current governance system (1 day of democracy every 3 - 4 years, with an aristocracy in the interim).
From the explanatory pages, linked previously,
From September 2021, the tool will show how APRA assessed the annual performance of each super fund. Until then, all funds will show as Not assessed in the Investment Performance column.
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Simple and straightforward. I am not sure what the unfilled [Investment performance] is there for?
Finally a site that is not dependent on super funds paying a 3rd party to give it false stars. Will it shut up the anti-Union politicians and commentators, who do not like the fact that it is the union funds, which are performing the best? No it wont.
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Useful comparisons. Could be improved by expressing fees as a % and giving net returns. This is the figure for more useful comparisons.
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The main problem for me is that there is little information about the various products that each provider has. At a glance it may seem that each has only one product which is not the case.
As already mentioned ethical investing is important to some. Some providers have an ethical product, some don’t and some only have ethical products. There are other differences such as the position along the spectrum from conservative (lower but more stable returns) to more aggressive (higher but less stable returns). Not everybody has the same appetite for risk. Thirdly it is common to have different products for those who are in accumulation mode and pension mode.
Superannuation planning is very complex and includes many issues that may be considered. This is not helped by the rat’s nest of tax effects that need to be considered too. The full gamut is only understood by specialists in the field. So either you pay for such advice or DIY. If you DIY you will necessarily be making some simplifying assumptions. To me the tool simplifies too much to be useful.
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One can click on the super fund text which is a hyperlink to the funds webpage.
If one is interested in a specialist fund, then they can go down the list and review what funds offer what they are after…by going to the individual fund’s webpage or seeking independent advice.
I think having potentially dozens of filter options will only confuse the issue for those who only take a cursory interest in their super. Those seeing more advanced options are possibly more aware of their financial decisions and may use multiple sources to gain an appreciation of what is offered.
Super account holders also need to be responsible for ensuring any super funds meets their personal preferences…rather than relying solely on fees and returns.
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Another perspective from a journalist:
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It must be a good start I guess and would identify if I was in a poorly performing fund. I don’t have a MySuper product so I can’t really see how to do any comparison except between MySuper products. I guess you could see how the MySuper in any fund is performing as a pointer but would then have to do more research. Also the annual fees seemed way out for me.
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Hi Diana, from 1 September this column will show whether your fund passed or failed a kind of ‘basic fitness test’ for managing your money.
More info here:
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