The reality of operations and what our politicians perceive are usually different – so once again I am not surprised.

Cheers….NW

We miss you, too. Hope your family and work world are well and happy – and all the best for the Silly Season!

Wishing you all a safe and happy Xmas & New Year.

Shonel

Dr G

Hi Dr G,
Thanks for the feedback. You are able to put your own video together by going to the strangely named http://www.jibjab.com website. There are some great themes, and in a time-constrained, fun-constrained modern world, they can add a little sparkle to everyone’s day.

It can be more than a little overwhelming, and rather complicated.

However, that is not a deliberate point, so much as a restatement of the current state of affairs. The focus of my note was to highlight the ways in which large institutions and pressure groups and government authorities use their marketing power and authority to push respective agendas. And to express some of the frustration that exists for planners who just want to be able to give a simple answer to a simple question, at a reasonable cost.

For example, one of the key changes happening within the financial services industry is a raft of legislative moves, lumped under the moniker “FOFA” (Future of Financial Advice). One component of these changes states that all fees and charges must be discrete and disclosed. However, there is a loophole put in there, which excludes those providing “intra-fund advice” (eg, an Industry Fund providing advice to the industry fund member) from having to disclose fees. Theoretically, the major ethical push behind all of these changes is for a pure “user pays” system. That is, you only pay for advice when you want to take it. However, the people with the lowest likely account balances, and the lowest engagement with their super funds, are the people who will end up subsidising advice provided to other people in their fund. The hypocrisy behind this is so blatant that it hurts.

And even though you have been lovely enough to ask me nicely, neither i nor anyone else is allowed to suggest to an individual “which fund or funds are the best” as an answer to a website question. Even if a person says “please…”!

That comes down to personal advice, and personal advice can only be delivered when specific regulatory minimums have been met (ie, an advisor must fulfill the “know-your-client-rule” requirements, and point out how a specific fund is appropriate to that individual’s specific circumstances. By making a specific recommendation for a single fund, the advisor is specifically stating that no other funds are AS APPROPRIATE. So you can begin to see why advisors have to be so careful about even the seemingly innocuous recommendation.

That doesn’t stop me from being able to provide general advice, of a non-personal nature. In fact, you’ve triggered a challenge to my Friday brain… i’ll work on a mind-map of the decisions that a person must take when considering issues such as the most appropriate super fund for them. It’ll take a little while to make it workable in a website way but i will see what i can do. If you are not already registered as a user on the website then register and you will be notified when i post it. Otherwise, just check back every now and then to see when it is updated.

i’ve covered a few areas for comparing superannuation on this blog but have really only touched on the subject. A financial planner will consider many more points than i have suggested so far. Of course, it does depend which planning group you ask the question of – some are limited to working with a very small “approved” list of super funds, at which stage the decision of which is best is easy – because there aren’t many to choose from.

Going back to general advice, when looking at which super fund is ‘best’ it can be worthwhile to work through these key points in any comparison : Insurance cover options and costs; Fees at different account value levels; Investment options that suit your preferences and understanding; the level of control you can exercise in these areas and finally, any improvements that may come about by ‘grouping’ (ie, additional employer support or discounts, multiple account fee reductions, ‘family’ discounts or concessions). This is not a complete listing but it’s a pretty good start. Financial planners will also consider the administration of the funds – some are a nightmare to deal with, and we all know stories of people shifting millions of dollars simply because of bad customer service!

Of course, the other alternative is to see a financial planner!