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FIRSTCHOICE WHOLESALE PENSION

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.

MEMBER OUTCOMES ASSESSMENT – APPROACH

Each year we set, and then assess ourselves against, a number of key focus areas we believe are important in providing a high quality superannuation 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 Pension against similar superannuation funds to show whether the product is competitive with 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 Pension that are related to member outcomes to determine whether we’re promoting 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 Wholesale Pension. This assessment is based on the matters assessed and also factors in anything relevant within the business or externally.

OVERALL PRODUCT DETERMINATION FOR THE YEAR ENDED 30 JUNE 2020


The assessment of the key outcomes of this product demonstrate that we are actively promoting the financial interests of our members in FirstChoice Wholesale Pension.

Product comparison

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 to provide competitive fees for members and continually review the outcomes. The fees and costs for FirstChoice Wholesale Pension are lower than most (81%) similar products. The fees for FirstChoice Wholesale Pension depend on the portfolio of investment options chosen 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 each investment option within FirstChoice Wholesale Pension performed better than half (58%) of comparable investments. The investment returns for FirstChoice Wholesale Pension depend on the portfolio of investment options chosen by the member.

Investment risk

All investments are subject to risk, and different strategies carry different levels of risk depending on the assets that make up the strategy. To measure risk, we assess the ‘risk-adjusted return’. This measures an investment’s performance after taking into account the amount of risk that was taken to achieve it. On average, the risk-adjusted return for the investment options within FirstChoice Wholesale Pension performed better than half (57%) of comparable investments. The risk-adjusted return experienced by a member depends on the portfolio of investment options chosen by the member.

PRODUCT ASSESSMENT

This assessment evaluates the performance of FirstChoice Wholesale Pension in delivering outcomes for our members. Each of these areas are assessed by comparing a range of metrics against relevant benchmarks.

KEY AREA
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 our contact centre. Member communications provide an important role in supporting and educating members. We continue to explore opportunities to engage with our members via digital channels, this includes continual investment in our member app which was launched in April 2020. We regularly add new features in response to your feedback. We also continue to make it easier for you to manage your super by simplifying process, including the digitisation of forms – over 75% of our forms are now digitised.
Investment strategy There is a large investment menu with strong ratings from independent research houses, however less than half (42%) of investment options exceeded their stated investment objectives. This result is consistent with the experience in the broader market, where fund managers have generally struggled to generate returns above the market index on an after-fee basis. Despite this, our investment options have, on average, outperformed comparable peers.
Scale and sustainability The product has significant scale and all sustainability measures were rated above average when compared with peers. The sustainability measures were funds under administration, net rollover ratio, total accounts growth rate, net cash flow ratio and average member balance.
Operating costs  We take managing member’s money seriously and are disciplined in our management of the fund’s operating expenses. This fund leverages and has the benefit of the broader administration scale of CFS which manages approximately $145bn. Our assessment of costs considers what we planned to spend and what we did 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 our operations. 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 on delivering for members’ financial interests.