Each year, along with other superannuation fund Trustees, we're required to publish the results of an annual member outcomes assessment for each of our products. This assessment shows how we’ve promoted the financial interests of our members over the prior financial year.
Annual product determination (for the year ended 30 June 2020)
Each year we set, and then assess ourselves against, a number of key focus areas we believe are important in providing a high qualitysuperannuation fund. We’ve completed a three-step evaluation process to assess our performance against the key focus areas:
- Product comparison
We’ve compared FirstChoice Wholesale Personal Super against similar superannuation funds to show whether the product is competitivewith similar products. We completed this comparison in the areas of fees, investment performance return and investment risk.
- Product assessment
We’ve assessed key areas of FirstChoice Wholesale Personal Super that are related to member outcomes to determine whether we’repromoting the financial interests of our members. A summary of the results is completed at the product level.
- Overall product determination
Finally, we’ve made an overall determination on whether we are promoting the financial interests of our members in FirstChoice WholesalePersonal Super. This assessment is based on the matters assessed and also factors in anything relevant within the business or externally.
Fees and costs
We aim to provide competitive fees for members and regularly review our fees to improve the financial outcomes for our members. We aim toprovide competitive fees for members and continually review the outcomes. The fees and costs for FirstChoice Wholesale Personal Super arelower than most (80%) of similar products. The fees for FirstChoice Wholesale Personal Super depend on the portfolio of investment optionschosen by the member.
Net investment return
We support members achieving their retirement goals by offering members the choice of 172 investment options. On average, the return for eachinvestment option within FirstChoice Wholesale Personal Super performed better than half (52%) of comparable investments. The investmentreturns for FirstChoice Wholesale Personal Super depend on the portfolio of investment options chosen by the member.
All investments are subject to risk, and different strategies carry different levels of risk depending on the assets that make up the strategy. Tomeasure risk, we assess the ‘risk-adjusted return’. This measures an investment’s performance after taking into account the amount of risk thatwas taken to achieve it. On average, the risk-adjusted return for the investment options within FirstChoice Wholesale Personal Super performedbetter than half (57%) of comparable investments. The risk-adjusted return experienced by a member depends on the portfolio of investmentoptions chosen by the member.
This assessment evaluates the performance of FirstChoice Wholesale Personal Super in delivering outcomes for our members. Each of theseareas are assessed by comparing a range of metrics against relevant benchmarks.
|Fees and costs||Total product fees, administration fees and advice fees all exceeded their specified benchmarks.|
|Options, benefits and facilities||Our members are regular users of key options, benefits and facilities including digital services and ourcontact centre. Member communications provide an important role in supporting and educating members.We will continue to explore opportunities to engage with our members via digital channels.|
|Investment strategy||Almost three-quarters (73%) of investment options are rated favourably by approved research houses. Theselection available within the investment menu is strongly favourable compared with other choice products,however slightly less than half (43%) of the investment options exceeded their disclosed benchmark. Thisresult is consistent with the experience in the broader market, where fund managers have generallystruggled to generate returns above the market index on an after-fee basis. Despite this, our investmentoptions have, on average, outperformed comparable peers.|
|Insurance strategy||When comparing across the measures of terms and conditions, premiums and claim times, the product ratedfavourably against industry benchmarks.|
|Insurance fees||Insurance cover is individually underwritten and selected by each member. Premiums as a percentage ofmembers’ estimated salary or account balance exceeds the industry benchmark, however this is driven bythe level of cover chosen by the member.|
|Scale and sustainability||The product has significant scale and all sustainability measures were rated above average when comparedwith peers.|
|Operating costs||We take managing member’s money seriously and are disciplined in our management of the fund’s operatingexpenses. This fund leverages and has the benefit of the broader administration scale of CFS whichmanages approximately $145bn. Our assessment of costs considers what we planned to spend and what wedid spend. For the year ending 30 June 2020, the Trustee spent more than planned across the business,which supported our ongoing investment in our product and services and other measures to maintain ouroperations. This additional investment was not passed onto members.|
We will continue to improve member outcomes by understanding members’ needs, enhancing the product offering and remaining focused ondelivering for members’ financial interests.