What is my super invested in?
A staple for financial planning is the long term investment asset of superannuation. For most people, when the topic shifts to their superannuation at the neighbourhood BBQ they mostly reply with “my super is with… and I don’t know how much is in it” or “who is my super again?, I think I have about 3 different ones”. Great start but this act of neglect can prove hazardous to what is mostly likely going to become your largest investment asset over the course of your life.
Superannuation is a complex beast with rules and regulations that even the strongest willed individual collapse at the knees in terror trying to understand. Knee trembling fear aside, it’s important to understand your superannuation provider and where your funds are invested. For most people, often starting with a new employer, you will supply the initial tax file declaration, and your choice of super fund, to which most people let the employer choose. Having the employer choose your superannuation may not always be as advantageous as you would think. Employers must contribute to your superannuation but they aren’t there to ensure your funds are invested to the best of its ability and the end game of this means that your funds will most often get invested into the superannuation providers default fund.
Default funds are not necessarily a bad thing but default means default and default for the most part is the safe haven for the superannuation provider to aim at achieving you the average investment return measured against all other industry or employer funds. The average returns generated from these default funds isn’t the outcome you should be seeking to achieve, especially if you are quite young and have decades of prosperous employment left.