Investors win as competition heats up among super funds

Investors are winners as competition heats up among superannuation funds. Fees are falling, investment options are expanding and instant online information is improving.

Take Living Super, the new retail online superannuation fund from ING Direct. It offers direct shares, ETFs and term deposits on top of a range of asset classes and diversified funds.

ING is marketing the fact that the balanced investment option has no administration, contribution or management fees. Half of the balanced option is invested in shares (30% Australian, 10% international and 10% international hedged) while the other half is in cash.

There are no fees with the cash and term deposit options, either.

But there are fees of around 0.5% for admin (capped at $1000), and 0.25% for investment management, for other options such as growth or Australian shares or Australian property.

Direct shares, ETFs and listed investment companies charge an annual admin fee of $180 and brokerage of $20 or 0.13%. All the investments are in State Street Global Advisors indexed funds.

You will need to take out insurance as it is doesn't come with the fund automatically. If you buy it through Living Super, watch out for hefty administration costs.

The insurer can charge up to 30% of premiums for income protection insurance and 10% for death and TPD insurance. You can buy insurance outside the fund.

MONEY VERDICT

ING Direct Living Super has plenty of investment choices such as direct shares, ETFs and term deposits, as well as the diversified options and asset classes.

The fact that no fees charged on certain options, such as the balanced fund, is attractive. Be aware that the balanced option is conservative (50% cash and 50% shares) and passively managed. The admin costs on insurance are on the high side.

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