The meteoric rise of industry funds has earned them a rightful place at the top of the superannuation food chain. But their standing is not a given, and the failures are starting to mount.
Retirement’s approach requires a profound change in how investors approach markets and construct portfolios, including arranging their income needs around three distinct periods of retired life, the financial advice firm’s founders said.
A joint review conducted by ASIC and APRA was scathing of funds’ collective attempts to meet their new legal obligation to help fund members plan for retirement, and urged them to “address, with urgency, the gaps in their approach”.
There are a range of factors that will determine the fees a member will pay. The difference could have a dramatic effect on the final balance of a retiree’s nest egg.
While the focus of the advice industry groups has very much been around making the day to day lives of those in the industry easier, the likes of the AFCA, Vanguard and several law firms have offered insight into the impact on the consumer.
Bringing oversight to a multi-trillion dollar sector was important, but the regulations are far from perfect, with many suggesting they effectively direct industry funds toward an indexed approach, or alternatively, don’t appreciate the nuances of investing for the very long-term.
“We are at a critical crossroad, with an aging population, and the “Great Australian Wealth Transfer” at our doorstep” explained Lifespan Financial Planning CEO Eugene Ardino in an open letter to Scott Morrison and Anthony Albanese on the eve of the Federal Election.
A bounce in share markets in March supported superannuation fund performance in the first quarter of 2022. However, with inflation concerns mounting, global share markets remain volatile, including the hard-hit US share market, which is likely to dent superannuation returns for the current financial year.
In 2021 the “Your Future Your Super” (YFYS) performance test was introduced to gauge whether default super funds, which collected billions in guaranteed contributions, were up-to-scratch in terms of their investment performance. Speaking at the SMSF Association’s National Conference 2022, Philip La Greca, executive manager of SMSF Technical & Strategic Solutions at Super Concepts, who…