Super funds urged to axe ‘sub-scale’ investment options

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Many super funds have investment options that do not have enough funds in them to be sustainable.

Superannuation funds need to simplify their investment menus, given that over a third of funds have more than 30 options on offer and many of them are “arguably sub-scale”, a report by one of the world’s largest professional services firms says.

To get to grips with investment options it is necessary to understand that growth assets, such as shares and property, are expected to produce higher returns over the long term than defensive assets, such as fixed interest and cash. Mercer says the default investment options offered by funds have generally produced “strong member outcomes” and are “sound and of increasingly high quality”.

Andrew Heaven, an AMP financial planner with WealthPartners Financial Solutions, says when selecting an investment option the time frame is important.

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