Superannuation options

[King]

I'd be interested to hear how other soloists tackle superannuation. Do you simply use one of the big companies, is industry super available for soloists or are you into DIY super?

[Felicity_Sapphire]

At present, I am still using the super fund that my previous employer used. It's classed as an industry fund for professional, managerial and service occupations. I have thought about changing to a big company (like AMP), but the returns are pretty good by comparison at the moment, so I've left it where it is.

I don't have enough in super to have a DIY fund - the costs would far outweigh the benefits.

[FinanceMan]

You can use a lot of the industry funds (some are restricted to particular industries) and any of the retail funds. Being self employed the insurance offerings of the various funds should be a significant factor in your choice, and you should seek some advice on this. The Life, TPD and income protection insurance offerings of retail funds are often more appropriate than those offerred through industry funds, this sort of thing needs to be taylored to your individual situation.

The returns of the industry funds over a long period have been been better than for retail funds, although they have significantly lagged recently. There is plenty of advertising that suggests the difference is because of commission payments made by retail funds, but there is plenty of research that suggests that this is not the case. Industry funds are fundamentally different from retail funds in that they invest large portions of their money in unlisted assets such as real estate, toll roads etc. whereas retail funds invest almost exclusively in listed assets. As a consequence retail funds are more liquid and pricing of units is more reflective of the underlying assets than is the case with industry funds, whose unit values can change dramatically each time an unlisted asset is revalued.

[Burgo]

Although I had a small super fund I bought property. Great investment, could claim mortgage off tax and was hit with capital gains tax when I sold.

Stick with a recognised super fund and we have some great financial advisers right here on the forum, so talk to the people you know.

[tradeinsure]

A lot of it will depend on your insurance requirements. The industry funds are okay if you just have a small balance and basic needs, but if you need comprehensive risk insurance (and really, all small business owners do) then you should definitely look towards the retail funds. You can also place your insurance within the fund and have the premiums paid from your super balance, which can help to free up cash flow.

Best to speak with a qualified adviser about your own personal needs and objectives.