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FIRSTCHOICE EMPLOYER

 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 Employer 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 Employer 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 Employer.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 – MYSUPER


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

OVERALL PRODUCT COMPARISON – MYSUPER

Fees and costs

We aim to provide competitive fees for members and regularly review our fees to improve the financial outcomes for our members. As at 30 June 2020, the fees and costs for FirstChoice Employer - MySuper were better than about two-thirds (63%) of similar funds. We have also reduced the administration fee from November 2020 to further improve the outcomes for our members.

Net investment return

We support members achieving their retirement goals by offering life stage investment options. These options use a diversified asset-allocation in which the share of each asset class automatically adjusts to lower risk as the member ages and their expected retirement date approaches. The return on average for each investment option within FirstChoice Employer - MySuper was lower than most (87%) comparable investments. Colonial First State’s MySuper investment options have a higher weighting (relative to the market indices) to ‘value’ equities, which have lagged the returns of markets. The underperformance was substantial in the first half of calendar year 2020 with equity markets falling heavily in March and rebounding from April to June but with wide variation in the performance of individual securities and sectors. In the current financial year to date, there has been a strong recovery in investment returns driven by recovering global markets.

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 for our products, 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 Employer performed below most (75% of) comparable investments. The risk-adjusted return experienced by a member depends on the portfolio of
investment options chosen by the member.

PRODUCT ASSESSMENT – MYSUPER

This assessment evaluates the performance of FirstChoice Employer – MySuper 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 fees were lower than benchmarks but as at 30 June 2020 administration fees were high relative to the super regulator’s heatmaps. Administration fees have subsequently been reduced in November 2020 to further benefit our members.
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 All investment options have exceeded their investment objectives. It may be helpful to understand that while investment performance is currently below that of peers across 1, 3 and 5-year timeframes, these results reflect a short period of time – focused on the early part of 2020 when conditions were volatile and particularly impacted our investment strategies. Pleasingly, financial markets experienced a strong recovery in the latter half of 2020 which benefited those strategies. And as that recovery continues, we anticipate that returns for these investment options, will benefit our strategies.
Insurance strategy
Insurance terms and conditions rated favourably to peers (78% exceeded their benchmarks) and more than one-third (43%) of insurance premium scenarios were lower than the median of peers.
Insurance fees On average, our members’ insurance premiums were considered affordable for most members using industry benchmarking.
Scale and sustainability 
This product continues to have significant scale, however membership is in decline and average balance lower than industry average. This fund leverag
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. The appropriate management of our costs supported our ability to reduce the administration fees charged to members from November 2020. 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, 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.

OVERALL PRODUCT DETERMINATION FOR THE YEAR ENDED 30 JUNE 2020 – CHOICE


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

OVERALL PRODUCT COMPARISON – CHOICE

Fees and costs
We aim to provide competitive fees for members and regularly review our fees to improve the financial outcomes for our members. As at 30 June 2020, the fees and costs for FirstChoice Employer - Choice were lower than most (92% of) similar products. We also reduced the administration fee from October 2020 to further improve the outcomes for our members.

Net investment return
We support members achieving their retirement goals by offering members the choice of 51 investment options. The return on average for each investment option within FirstChoice Employer - Choice outperformed approximately almost two-thirds (59%) of comparable investments. The investment returns for the product 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 for our products, 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 Employer - Choice performed better than almost two-thirds (60%) of comparable investments. The risk-adjusted return experienced by a member depends on the portfolio of investment options chosen by the member.

PRODUCT ASSESSMENT – CHOICE

This assessment evaluates the performance of FirstChoice Employer – Choice 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 fees were lower than benchmarks but administration fees were high relative to the super regulator’s heatmaps. Administration fees have subsequently been reduced in November 2020 to further benefit our members.
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 More than three-quarters (75%) of investment options are rated favourably by approved research houses. The selection available within the investment menu is strongly favourable compared with other choice products and more than half (54%) of the investment options exceeded their disclosed benchmark.
Insurance strategy
Insurance terms and conditions rated favourably to peers (78% exceeded their benchmarks) and more than one-third (43%) of insurance premium scenarios were lower than the median of peers.
Insurance fees On average, our members’ insurance premiums were considered affordable for most members using industry benchmarking.
Scale and sustainability 
This product continues to have significant scale, however membership is in decline and average balance lower than industry average. This fund leverages and has the benefit of the broader administration scale of CFS which manages approximately $145bn.
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. The appropriate management of our costs supported our ability to reduce the administration fees charged to members from November 2020. 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 are determined to continuously improving member outcomes by understanding members’ needs, enhancing the product offering and remaining focused on delivering for members’ financial interests.