The Federal Budget 2020

This year the government did not make changes at all to the details of superannuation in Australia, but they did introduce a new initiative called “Your Future, Your Super”. It’s another measure that again wrestles the personal responsibility for your super away from the individual and has your choices controlled by someone else. The limitation in this initiative is that it only examines the default service settings for your super without looking at options that might present more value to you as far as maximising your balance at retirement.

In effect, the government is progressing with initiatives that disengage you from your super as a wealth creation strategy. To optimise your own super asset, you must pay it some attention.

The development of new technology, such as SuperWiser, make it easier than ever before to optimise your super and provides you with more opportunity to make more super dollars and improve your lifestyle in retirement.

Make yourself SuperWiser

The truth is that super is not as complicated as you think. The financial services industry has made it complicated with a wide array of products and services that appear beneficial but aren’t aimed at optimising your super value.

Finding information can seem difficult, sources of information are usually less than reliable because of potential for bias. Unfortunately this often means you are more likely to make the decision that is in someone else’s best interest and not yours.

Where someone provides you with meaningful information for consideration, the first step is always to pause and filter that information to the point where you have sufficient knowledge to make a decision in your best interest.

Informed decisions always work out better than blind guesswork.

Straightforward information?

This is not always easy to find but then maybe it is hard to locate a source of truth in this modern world. Let’s start with the statement that a key initiative in improving your super is finding quality information. The government has presented quite a few initiatives in making various attempts to improve the value delivered by financial services companies around super. There has been the introduction of a MySuper Investment Default some ten years ago which in theory should have improved investment returns. A comparison for MySuper investment returns would indicate the following range between bottom and top performers:

PerformerInvestment OptionAnnual Projected Income in Retirement to Age 67
Age 25
Salary $60,000
Age 35
Salary $80,000
Age 45
Salary $85,000
Balance $20,000Balance $75,000Balance $120,000
TopFactory Default
-MySuper
$37,300$30,600$23,300
BottomFactory Default
-MySuper
$30,500$25,200$19,400
Annual Difference$6,800
Plus 22%
$5,400
Plus 21%
$3,900
Plus 20%

Figures obtained from AXIS Financial Group Pty Ltd as at 30/06/2020

By using a products investment choice menu, how does the top MySuper investment strategy compare with what is the top performing SuperWiser recommended portfolio:

PerformerInvestment OptionAnnual Projected Income in Retirement to Age 67
Age 25
Salary $60,000
Age 35
Salary $80,000
Age 45
Salary $85,000
Balance $20,000Balance $75,000Balance $120,000
TopFactory Default
-MySuper
$37,300$30,600$23,300
TopSuperWiser –
High Growth
$44,300$35,500$25,900
Annual Difference$7,000
Plus Another 19%
$4,900
Plus Another 16%
$2,600
Plus Another 11%

Figures obtained from AXIS Financial Group Pty Ltd as at 30/06/2020

The latest government initiative announced within the federal budget still focuses purely on the MySuper Investment Default. This has become the standard default for most people and no product will tell you about their comparable performance with other MySuper defaults (unless it is to their advantage) and most certainly government initiative is only focused on the MySuper service model and not looking at other non-standard investment options within products.

Where to from here?

Upon demonstrating SuperWiser to one large product provider, a senior executive commented that this innovation is unusable for them as the calculations would identify how many other products deliver more value. The executive unwisely commented “we would have to explain to the board why we have lost all our clients”.

The financial services industry is known for its high fees and its poor delivery of service value. In terms of delivering value at an individual account level, product providers see this as an impossible ask involving the recruitment of too many people and presenting too many organisational complications.

Clearly technology is the answer but any service technology from super product providers is likely to focus on retaining members, not adding value. Which means technology needs to come from those who have no ownership in any product.

Try SuperWiser

SuperWiser allows you to examine what you are currently doing against what you could do for yourself in managing your super. Minimal information is required to get started.

As an authorised representative under an AFSL license as provided by AXIS Financial Group Pty Ltd (ABN 21 092 889 579, AFSL 233680), SuperWiser proceeds to request some personal information so the initial calculation can be confirmed. This requires an authority to access information as provided by your current product and as required under current regulation. As always around super, regulation must be followed.

The next stage involves some explanation as to where you can do better by comparing the appropriate elements of your current super against what might be better by way of cost, target market return, target outperformance return and then salary sacrifice. The proposition will be the provision of advice and an implementation service of said advice, all for the affordable price of $220 including GST.

Find your knowledge on www.superwiser.com.au

This document was prepared and issued by Super Simpler Pty Ltd (ABN 74 150 240 421) a privately-owned company operating as a Corporate Authorised Representative (CAR No. 468 201) of AXIS Financial Group Pty Ltd (ABN 21 092 889 579, AFSL 233 680). The information contained within it is not advice. It provides general information only and does not take into account your individual objectives, financial situation or needs. You should assess whether the information is appropriate for you and consider talking with your financial adviser before making an investment decision. Information in this publication, which is taken from sources other than Super Simpler, is believed to be accurate. However, subject to any contrary provision in any applicable law, neither Super Simpler, nor its employees and directors, provide any warranty of accuracy or reliability in relation to such information or accepts any liability to any person who relies on it.

Personalised advice at an individual account level is rare for the super industry. Most product providers operate more like call centres dispensing general advice and answering questions rather than providing members with personalised financial advice around product, contributions, and investment, and this often means that members see their retirement savings underperform by 20% or more.

Super Choices

The choices you make around your super fund, contributions, and investment strategies are paramount if you are hoping to maximise your retirement balance and enjoy more financial freedom in your retirement. It’s hard to find good, comprehensive information on super funds to properly compare them however, and it’s equally difficult to formulate goals around yoursuper and properly track its performance to ensure that your super choice is still the right one for you.

Common Mistakes

There are a number of common mistakes that cost most people more than they realise:

  • Not setting medium and long term goals for your super
  • Multiple accounts
  • Multiple insurance policies
  • Not reading your annual statement
  • Not examining the performance of your main asset against other options
  • Not talking to someone who delivers affordable advice

Personal Scaled Advice

Where product providers do deliver service at individual level, they tend to target prospects for their financial planning operations, a much higher margin service than personal scaled advice.

Personal scaled advice means an authorised representative will examine just your super and provide advice. Product providers would see such a service as high on cost and low on margin. Not their preferred commercial strategy.

Where you have a database of popular products detailing aspects of their cost structure and also their potential to outperform other like products, it becomes mathematically possible to analyse what your super will become over time and therefore what your projected income in retirement might be if you make some informed decisions.

SuperWiser does all of that for you, from initial analysis through to implementation of all recommendations made. Considering the complexities around super, this is no mean feat.

Consolidation

SuperWiser directs you to open a MyGov account which can then be linked to your super. This means you will see any lost super you have and you will be able to consolidate your super into the product recommended by SuperWiser. Without the help of SuperWiser, you would be aiming blind in terms of what product is right for you.

Most people are beginning to realise the value presented by MyGov, partly through the recent release of super allowed as a consequence of the current pandemic.

Monitoring Super Progress

SuperWiser enables medium term monitoring of super by informing you at what age you should achieve your next uplift in value of the next hundred thousand dollars. Super is not a park and forget asset at any time. Super should be monitored and reviewed as frequently as once a year with someone that has expertise in the industry.

This is known as active servicing, with SuperWiser able to service a bulk individual market at a remarkably affordable price of $220 including GST for implementation. Get your free evaluation now and see if there’s a better super set up out there for you.

This document was prepared and issued by Super Simpler Pty Ltd (ABN 74 150 240 421) a privately-owned company operating as a Corporate Authorised Representative (CAR No. 468 201) of AXIS Financial Group Pty Ltd (ABN 21 092 889 579, AFSL 233 680). The information contained within it is not advice. It provides general information only and does not take into account your individual objectives, financial situation or needs. You should assess whether the information is appropriate for you and consider talking with your financial adviser before making an investment decision. Information in this publication, which is taken from sources other than Super Simpler, is believed to be accurate. However, subject to any contrary provision in any applicable law, neither Super Simpler, nor its employees and directors, provide any warranty of accuracy or reliability in relation to such information or accepts any liability to any person who relies on it.

Nothing as complicated as super?

Good things are rarely said about super, and that often discourages people from making informed decisions. But consider the following:

  • Super is your wealth creation program for life after work
  • Remaining inactive around your super could cost you close to $100,000 down the track
  • There are affordable options available to make sure you don’t miss out and regret being inactive around your super!

For some, sorting out your super can be awkward. Others may base their choices on the annually reported investment returns from the products in the market – unfortunately these don’t tell the full story and aren’t always the ideal way to choose a fund.

Seeing the difference in super

As a straightforward statement of fact, there are as many fraudsters in this world as there are honest people selling a service. It is often hard to see the difference.

That’s why we’ve developed SuperWiser! Super is one of the most regulated industries in Australia and the bar is set high. SuperWiser was developed by Super Simpler Pty Ltd which operates under an Australian Financial Services License (AFSL), No. 233680, held by AXIS Financial Group Pty Ltd. As an obligation under said license, AXIS Financial Group Pty Ltd must have what is called an Approved Product List (APL), detailing what financial products their authorised representatives are allowed to provide to market.

SuperWiser’s Approved Product List

SuperWiser has as its core an actuarial algorithm which examines which product will deliver better value for each and every individual. The actuarial algorithm uses the underlying analysis of approved product as the basis of this calculation. Broadly speaking, SuperWiser’s approved product list examines the available product from a number of perspectives:

  • Is the product actually approved for recommendation?
  • If approved for recommendation, what are the comparable qualities between simply remaining in the product default against better advice in considering an individual’s circumstances and the quality of the investment choice menu?
  • Based upon the analysis of the product default versus a personalised investment strategy, each option is awarded a points score which determines an outperformance target of between 0% and up to 0.6%

SuperWiser’s approved product list is scrutinised every 6 months from the point of view of the appropriateness of the advice. Changes are exacted as appropriate to the data.

Information Available

SuperWiser website will give you a summary analysis of the super product you are currently using. This will advise you if your product is approved and some information to tell you whether or not you can do better.

There is a free calculator to be accessed on the website, and this will inform you if SuperWiser believes it can help you make a lot more of your super from a financial value point of view. In doing the projection, SuperWiser is examining costs, contributions and also what investment strategy you might be in.

If you are interested in finding out more and under the obligations as defined in the above Australian Financial Services License, the first step has to be to confirm the original calculation so SuperWiser knows a significant improvement in super outcomes can be delivered. So you do have to register and provide the correct details for your super and allow SuperWiser to contact your product provider to confirm the accurate information involved. This process involves what is known as an Authority to Access Information. Certified proof of identity is also required to complete this step.

SuperWiser then updates the calculation and either says proceed as the benefit is confirmed or SuperWiser advises you not to proceed as the original value as estimated cannot be delivered.

The Decision to Buy

There is some final information required just to ensure SuperWiser has all the accurate facts to help you achieve your stated goals and objectives, defined as age of retirement and also your desired projected income in retirement. Still at this point everything is done for free.

SuperWiser will now state why a higher projected income in retirement can be delivered compared to your current super, based upon an analysis of cost, investment returns and also contributions. It is at this point you decide whether or not you believe the promised result. So far there is no cost. Implementing the advice you receive can be done by us for a very affordable $220.

A New & Affordable Service

SuperWiser offers personal scaled advice just about your super. It is not about selling products but about explaining to you how to optimise your super.

If you pay sensible attention to your key assets, it is amazing how they may exceed your expectations. SuperWiser can help you to assess your super and monitor it going forward.

Get your free evaluation now. It always pays to keep an eye on your super!

This document was prepared and issued by Super Simpler Pty Ltd (ABN 74 150 240 421) a privately-owned company operating as a Corporate Authorised Representative (CAR No. 468 201) of AXIS Financial Group Pty Ltd (ABN 21 092 889 579, AFSL 233 680). The information contained within it is not advice. It provides general information only and does not take into account your individual objectives, financial situation or needs. You should assess whether the information is appropriate for you and consider talking with your financial adviser before making an investment decision. Information in this publication, which is taken from sources other than Super Simpler, is believed to be accurate. However, subject to any contrary provision in any applicable law, neither Super Simpler, nor its employees and directors, provide any warranty of accuracy or reliability in relation to such information or accepts any liability to any person who relies on it.

In the blink of an eye

Retirement is never a long way off and you will all be there before you know it. The introduction of compulsory super is one of the better government initiatives of the last 70 years and so it’s well worth it to pay attention to it and think about what you are, or aren’t doing, to optimise your retirement savings.

When should I start paying attention?

The simple answer is NOW. Whether you’re 25, 40 or 55, you can benefit from paying attention to your super. Whilst you can’t change the past, you can get on course to a better future. Super is intended to be your income when you no longer work and the level of that income will be determined by how well you managed your wealth creation strategies during your career, in particular your super.

Many people are complacent about super, viewing it as a bit of annoyance. Arguably, the younger you are, the less engaged in super you are likely to be – retirement seems like a long way away after all! But you will undoubtedly reap the benefits in later life if you optimise your super from early on in your career.

SuperWiser can help you to maximise the potential of your super. The right choice of product and investment strategy can help you live a more comfortable retirement.

Preservation, choices and destiny

Generally, your super is not accessible until you are old enough. The government has made an unprecedented exception recently as a consequence of the coronavirus pandemic. Australian’s can access up to $10,000 for the 2019-20 and 2020-21 financial years however there are a number of conditions that they must meet to qualify for a withdrawal.

In most cases, super is preserved until you reach your preservation age of 60 (those born prior to 1st July 1964 can access their super a little earlier – consult your financial adviser to find out your preservation age). At 60, you can access your super if you’ve retired from work. At the age 65, you can access your retirement savings and benefits whilst continuing to work if you choose to.

Those who have managed their super well over the long term may find that they have the option to retire at the age of 60. It’s also possible to access super between the ages of 60 to 64 through a transition to retirement arrangement which would allow you to go part time.

Taking responsibility for your super and making informed choices now allows you to take your destiny and your future into your own hands. Making the right choices now could mean an earlier and more comfortable retirement down the road.

Super and health problems

Whilst most of us will live to enjoy our retirement, some of us will face challenges to our health before we make it there – this is why many consider personal insurance. Super should be balanced between your savings strategy and personal needs and circumstances. Your attention to super now could be a lifeline to you and your family in the future should your health deteriorate resulting in death or total and permanent disability.

In the event of death, everyone should have the comfort of a binding nomination of beneficiary attached to their account. Statistics indicate that many people do not have a beneficiary nominated, a problem which slows down the payment of your super assets to your loved ones.

In the event of total and permanent disablement, the claims process can be lengthy and everyone in that situation needs someone who understands the terms and conditions of policy on their side representing their claim to the insurer and subsequently to the trustee – getting good financial advice can make a huge difference to both your savings and your peace of mind.

Time to get organised

By spending just a small amount of time each year on your super, you can expect to dramatically improve your retirement outcomes. Get a free evaluation from SuperWiser today, it takes less time than you spent reading this article and will get you on track to a better retirement!

This document was prepared and issued by Super Simpler Pty Ltd (ABN 74 150 240 421) a privately-owned company operating as a Corporate Authorised Representative (CAR No. 468 201) of AXIS Financial Group Pty Ltd (ABN 21 092 889 579, AFSL 233 680). The information contained within it is not advice. It provides general information only and does not take into account your individual objectives, financial situation or needs. You should assess whether the information is appropriate for you and consider talking with your financial adviser before making an investment decision. Information in this publication, which is taken from sources other than Super Simpler, is believed to be accurate. However, subject to any contrary provision in any applicable law, neither Super Simpler, nor its employees and directors, provide any warranty of accuracy or reliability in relation to such information or accepts any liability to any person who relies on it.