‘I want to switch super funds, but do I have to pay for the process?’

Nov 19, 2019
Don’t get caged into a superannuation funds by bonds of loyalty or fear of fees. Source: Getty.

Q: The boat I am in is that my super (and my wife’s) is with well-known retail superannuation fund and am seriously considering switching to one of the leading industry funds with low fees. I have discussed this with the adviser connected to my current fund, who will charge me like a wounded bull for the ‘advice’ and process. I am aware I can do this myself.

I cannot see any advantage in staying with current fund, even if they do get their act together and dig themselves out of the hole they’re in following the Royal Commission. And I’m not sure I even need an adviser as I don’t have a huge amount to bother Centrelink with regard to my Age Pension. The adviser is an old work colleague who switched careers and I am a loyal person but feel its a no-brainer to switch now?

A: It sounds like your combined super is below the Age Pension asset test level and you get the full Age Pension. If this is the case, there is a question as to whether you need to keep your money in a super fund at all.

Full age pensioners do not pay any tax and a major reason to have money in super is to reduce tax. If, however, you want to keep money in super, I am happy with the industry fund you name in general terms, relative to your retail fund, but I can’t recommend a change without a lot more detail as to the comparison of funds in all respects.

Having said that, as long as the risk profile is similar, a move to the industry fund is okay if the fees are lower. And yes, you can do this move without your adviser if you wish and the industry fund will delighted to help you with the process at no charge.

If anyone is considering switching super funds but is unsure how to do so, you can read a step-by-step guide to switching here.

If you have a question for Starts at 60’s money experts, email it to [email protected].

Important information: The information provided on this website is of a general nature and for information purposes only. It does not take into account your objectives, financial situation or needs. It is not financial product advice and must not be relied upon as such. Before making any financial decision you should determine whether the information is appropriate in terms of your particular circumstances and seek advice from an independent licensed financial services professional.

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