Veracity of super performance figures questioned
Superannuation fund performance tables have come in for another round of criticism with financial planning partner at accounting and financial services firm HLB Mann Judd, Michael Hutton, warning that they can be misleading.
Hutton said focusing on short-term fund performance tables and results themselves could be misleading and provide only a very elementary guide to developing an appropriate approach towards retirement funds.
“When yet another superannuation performance table is released, the vested interests come out to claim that one fund offers better value than another, or that this type of investment is the most appropriate,” he said. “However, discussion about superannuation should make it clear that it is only one part of retirement savings, albeit, usually the most important, and may not fully provide what a person will need in retirement.”
Hutton said performance tables could only be a very elementary guide to developing appropriate approaches for retirement savings, and that past results were no indication of future performance.
“Therefore, anyone basing long-term investment decisions solely on the latest ranking of a superannuation fund is making a fundamental error,” he told Money Management.
“Most Australians still have a 15, 20 or even 30 year retirement savings timeframe, depending on individual age, yet superannuation performance tables focus on past investment periods of under 10 years,” Hutton said.
He said that it was also worth noting that even though a member might be with a particular fund mentioned in a performance table, that same person’s asset allocation might be quite different to the core fund used in the study.
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