28.08.2013

Investment Options: Investing in Superannuation

Investing in superannuation, this is often a forgotten asset class. This could be because of lack of control, lack of transparency or the constantly changing legislation.

It’s important however that you understand different options you have with superannuation. There are three main ways you can invest in super, one is through an industry fund. This is a low cost solution which provides very little features and benefits but at the same time it doesn’t cost you much. It is commonly used when you have a low balance.

The second way is through a retail or wholesale fund. This is when your balance increases, and you want access to more funds and flexibility within your superannuation. Typically the fee is a little bit higher than an industry fund but the features and benefits you get will outweigh the increase in the fee.

The third way is through a Self-Managed Super Fund. This is a very popular way of investing in super because it gives you the ultimate control. You no longer have to invest via a product provider either the industry or retail fund you are the trustee so you have 100% control over what you do with your superannuation.

It is important however, regardless of whether you are in an industry, retail or self-managed superannuation fund that you look at the following three things when analysing what is appropriate for you. The first one is fees - you are not necessarily looking for the cheapest you just want it to be competitive and the funds gives you the features and benefits you are looking for. The second part is insurance – a lot of personal insurances can be held within superannuation. Every fund will have different offerings and different prices of what the insurance is. By understanding your needs and what you are willing to pay will help you define what superannuation is appropriate for you. The third piece is investment options – a lot of people don’t actually realise that they can choose where they invest their super money.

So for example, if you are in a retail fund you can select from cash, fixed interest, Australian Shares, International Shares or even property.

The choice is yours, you are only limited to the options provided by the product provider. So it is important, regardless of what stage you are in your life that you understand where your super is and what the best option is for you.