A superannuation expert has suggested that investors looking to blame someone for the drop in the value of their super fund need to take a good look in their mirror.
Jeff Bresnahan, managing director of super research firm SuperRatings, released figures showing the average super fund (the default balanced option of most funds) increased 1.01% in May, but is down 16.25% over the last 12 months.
But Bresnahan says too many super fund members simply stick with the default super fund setting (the average balance fund option) rather than trying to examine other super investment options that may have performed better during the financial crisis.
"Despite the temptation to blame the super industry itself, reality says that nearly all consumers have had, for over a decade now, the ability to switch investment options within their own fund," Bresnahan says.
He says that 82% of pre-retiree super fund members "appear, whether through apathy or intentionally, to sit contentedly in balanced and growth style investment options".
SuperRatings research shows that just 3.8% of super funds have moved away from the average balanced super fund option in the last 12 months.
Bresnahan says there is a "massive inconsistency" in Australians' approach to financial products - while they will spend hours pouring over information about mortgage rates, far too many super fund members have little understanding of where their super is invested.
"You go out in the street as ask someone how their super is going and they'll say, ‘yeah, it's OK. What they don't know that 50-60% of their money is in the sharemarket."
Super fund members need to get more involved in their super before they start blaming the industry.
"I think there's a belief out there that the super funds could have done more to protect them. The reality is that throughout this GFC there have been options for every consumer."
