Ask Paul: We've changed super funds five times, is it time to swap again?


Published on

Dear Paul,

I have a general super enquiry, but one that very much needs your point of view, please.

Both my husband and I are 53 and have self-managed super funds. We have around $200,000 and $400,000 respectively.

ask paul clitheroe is it time to change super funds again

We have been with them for five years and the portfolio is split between growth and balanced (given our age), yet it has returned only 2.78% and 1.79% respectively over the past five years - hardly brilliant.

I am reluctant to change funds yet again (we've done so about five times over our working life), yet I'm also aware that the returns are poor.

We will be working for at least another 15 years.

Do we bite the bullet yet again and speak to our financial adviser and pay for an analysis of our current provider and for recommendations for our new provider, or do we jump ship and go for a fund like AustralianSuper, Aware Super or the new Vanguard product and do it ourselves?

We don't want to muck up our future, but we can't make the wrong decision, either. - Sarah

Hi Sarah, with a split between balanced and growth funds, I think we can call your overall super as invested in "balanced-plus".

Presumably the returns you quote are per year. It is not fair to your super fund provider for me to comment on these returns, as I have no idea whether insurance costs and so on are coming out the fund and, of course, are impacting on your returns.

So, I think the best thing to do is to look at roughly what would "balanced-plus" returns have been over the past five years, but this does not include fees or any insurance contributions.

This is pretty rough and ready, but I would expect balanced-plus returns over the past five years to be around minus 5% in 2022, 13% in 2021, 3.5% in 2020, 14.5% in 2019 and about zero in 2018, so a bit over 5% a year. But remember, no fees or super are allowed for in these returns.

What I can say is that pretty much any big super fund does much the same when it comes to investing, so a key for me is the lowest fees possible.

Here it is pretty hard to go past the names you mention, such as AustralianSuper and Vanguard. I'd suggest, though, you take a close look at the returns they have generated over a similar five-year timeframe to your current provider, including all costs.

Get stories like this in our newsletters.

Related Stories


Paul Clitheroe AM is founder and editorial adviser of Money magazine. He is one of Australia's leading financial voices, responsible for bringing financial insight to Australians through personal finance books, the Money TV show, and this publication, which he established in 1999. Paul is the chair of the Australian Government Financial Literacy Board and is chairman of InvestSMART Financial Services. He is the chair of Financial Literacy at Macquarie University where he is also a Professor with the School of Business and Economics. Ask Paul your money question. Unfortunately Paul cannot respond to questions posted in the comments section. View our disclaimer.
Mandy Hughes
April 21, 2023 12.36pm

'...a key for me is the lowest fees possible'.

With the way Super Funds are, lowest fees possible represents just as much risk as the portfolio itself. With my QSuper looking at a class action lawsuit due to its fees, it begs one to wonder whether Super is anything other than a glorified bank account.

Kevin Watchirs
May 14, 2023 11.27pm

After lots of consultations and seeking advice I put my life savings with Aware Super early this year. As you don't get regular updates with most super funds I randomly rang them to see how my account was performing. I nearly vomited when I found out my account had dropped $10,000 in the first ten weeks.!! Over the next 2 frantic weeks I rang every advocacy group and financial support network that was available to try to find if I had any recourse. Unfortunately the answer was the same everywhere - super funds can't be held liable for reckless or unprofessional behaviour. I did my 10k cold ! At my age I can't afford such a gamble so I'm out of super and back to the bank where at least you can get some security.