Self Managed Super Funds or Industry Super Funds?
Monday October 27, 2008
Self managed super funds and industry super funds are both known for charging low fees, but which is most suitable to your needs? Both these types of super funds have advantages and disadvantages of varying severity depending on the user.
Industry super funds
Industry super funds will often charge reasonably low fees. They can still end up to be rather poor value for people with a lot of retirement savings in their super funds due to percentage based performance fees, though. Industry super funds are quite easy to keep track of and often allow for a diverse range of investment options. Most industry super funds allow users to spread their funds across multiple strategies, so that users may expose a portion of their funds to riskier but potentially more rewarding investment options while keeping the majority of funds in safer investments.
Self managed super funds
Self managed super funds such as ESUPERFUND can charge very low fees compared to industry super funds and other types of super funds, but they do require you to understand how a super fund works. This makes self managed super funds somewhat harder to manage than industry super funds. The advantages in savings on fees extend to more than just the basic management fees, though. Self managed super funds should not charge a performance fee, as you will be making the choices for your investments.
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