Australia: A matter of choice

With Choice of Fund introduced recently, Navigator is warning people to look beyond cheap investment fees when choosing a superannuation fund and to consider the following:

• Tax advantages
• Advice availability
• Insurance options
• Direct Shares
• On-line services
• Access to a Spouse Account
• Investment Fees
• Investment Performance
• Fees and charges for moving.

“It’s the old adage of ‘you get what you pay for’ and you certainly don’t want to be compromising your retirement lifestyle because you were looking for the cheapest option,” says Navigator’s chief operating officer, Grant Salmon.

“For most people, their superannuation is likely to be the largest and most important savings fund they have during the course of their working life. It’s essential to structure your superannuation fund to fit your lifestyle and plans – don’t simply pick a run-of-the-mill product which is not designed for optimum benefits,” said Grant.

For example, the life insurance component of a superannuation fund, including death and disability and income protection, can differ greatly between providers. The below graph shows the life insurance lump sum needed for a family with two children if they lost a parent in there forties on either a low, mid and high income.

“As you can see from the attached graph you need a considerable amount of money to fund a family over the duration and often the life insurance component of your superannuation fund is the most cost effective way of doing this,” said Grant.

While most superannuation funds do offer a life insurance option there can be a wide variation of options and services available. Some will only offer a very minimum basic cover and others will reduce some of the cover benefits as their customers grow older.

If life insurance is important to you – then it’s essential to find exactly what is on offer. For example, people in some high risk occupations may find it hard to purchase insurance outside of superannuation so this is their only possible source of wealth protection.

Aviva recently conducted a survey which highlighted that more than 30% of all respondents said they will definitely, or are likely, to switch superannuation funds when Choice of Fund is available¹.

“The Choice of Fund legislation can work really well for many people, it is just a case of checking out all the options before making a decision. It’s not unlike choosing a mortgage – you need a product which suits you and your family’s needs for now and the future – this is a truly a lifetime product,” said Grant.

Before making any decisions about your superannuation, please contact a financial adviser who can take your whole financial situation into account to create a robust plan to see you through to retirement.

-ends-

For further information please contact:
Simon Morgan
Group General Manager Public Affairs
Phone: (03) 9829 8892
Mobile: 0407 966 632

Notes to editors:

• Aviva Australia is a group of two specialist financial services companies: Navigator and Norwich Union Life Australia Ltd. Portfolio Partners is the Australian funds management arm of Aviva plc. Through these companies we provide products and services in the areas of wealth creation and wealth protection for more than 300,000 customers throughout Australia.
• Globally, Aviva Australia is part of Aviva plc, the world’s fifth largest insurance group, the largest insurer in the UK and one of the top five life companies in Europe. Aviva was formed in May 2000 through the global merger of CGU plc and Norwich Union plc.
• Aviva is a leading provider of life and pensions products to Europe and has substantial businesses elsewhere around the world. Its main activities are long-term savings, fund management and general insurance. It has premium income and investment sales from continuing operations of A$78.6 billion, and more than A$645 billion of assets under management (as at 7July 2005). The group has more than 60,000 employees and 30 million customers worldwide.
• The information in this document reflects Navigator Australia Limited's ('Navigator’) understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. The information given in this document is of a general nature and has not taken into account the investment objectives, financial situation or particular needs of any particular person and it is not a substitute for professional advice. Applications to invest in a financial product issued by Navigator, or any of its related entities, must be made by completing the application form attached to the applicable Product Disclosure Statement ("PDS"). A PDS is available from Navigator or your financial adviser. Before making an investment decision on the basis of the information above, a prospective investor needs to consider, with or without the assistance of a professional adviser whether the information is appropriate in the light of their particular investment needs, objectives and financial circumstances. Aviva does not receive any remuneration in relation to the provision of information available from this press release which is of a general nature only.

¹ Aviva Member Choice Survey, January 2005.