Definition of Retail Super fund

Does any one know if Colonial First State's Rollover and Super is a retail super fund? I am thinking of moving to Industry super after the APRA report which found retail super funds to be worst performer due to high fee.

I used to have great part of my super with Caresuper but a financial adviser asked me to move all to CFS. I am regret taking the advice.

Yep CFS is a retail fund.

Yes, Industry funds are cheaper and yes their diversified options (Balanced, Growth etc) will generally perform better than retail funds. As they are invested similarly (almost the same asset allocation) and are quite often managed by the same fund managers.

A retail fund however may provide the potential for higher returns if you and your advisor are able to select the right mix of single sector funds (which is quite difficult over the long term). Previously they've included, but not so much anymore resources, BRIC funds, geared share funds, small companies etc (these options are generally not available in industry funds).

Industry funds have fewer investment options, limited flexibility, less bells and whistles and no one to tell you if you’re doing it right.

There’s no such thing as a free lunch, so if you want ongoing advice you'll have to pay for it, in some form or another. Commissions via super funds is okay with me. But if you don't want an advisor to tell you what to do and hold your hand for the next 20 years, don't pay them and use an industry fund instead.

But remember, good advice is worth every dollar. Contrary to popular belief it’s not the role of an advisor to pick the “best” superfund which gives the “best” returns each year. Your superfund is just a vehicle to get you from point A to point B, it’s an advisors role to tell you how to get there.

Thank you for your help.
"But remember, good advice is worth every dollar". This is true but I have not found good advice even after paying top dollars. In fact, the advice has done me more harm. I do not have trust in advisers any more after trying both the "free" as well as fee based planners.

Hi Dissed,

If you feel that you have been wronged by the planner you can complain to the licensee.

Cheers,

Dan

Hi Dissed.

Industry funds are great because they keep costs low. I also think that commissions to advisers are an unnecessary expense.

But they have some drawbacks:

They use active managers to try and beat the market - this cannot be consistantly achieved without luck (5000 monkeys throwing darts at dartboard - one's bound to hit the board a few times.)

You dont always have control over your investments or investment decisions.


Some do not offer pension funds or seamless flow of funds from super to pension, meaning that you need to sell to cash and then rollover to pension funds. This can hurt a bit as you pay 10% tax on all those earnings plus the joy of unneccessary transaction costs.

There are a lot of things you need to consider before switching funds. I would higher suggest sourcing a good financial planner who can advise before you do anything.


The comment above does not constite formal financial advice. You should discuss your personal circumstances with a professional financial planner before making an investment decision.

This is very helpful, thank you. In a "structurally corrupt" industry where source of corruption is source of payment for advice, I am afraid I will not find a good adviser (I have tried for 4 years - after incompetencies, losses and expenses I am done with them). I found more help from this site then from my advisers. I am into self education as the best way forward. I admire you guys who are so willing to help. Thank you.

Hi Dissed.

I agree the industry does have some corrupt individuals and the source of payment can lead to that.

Note though that there are a few of us out there that are charging on a fee only basis and refuse to buy in to the bs that the others feed on. Its a pity that you have expierence some nasty ones in the past - we're not all like that.

Good luck and keep reading - this site does offer a lot for investor education