Many Australians don’t make the correlation that they likely made their first ever investment through their super fund. While their investment needs change over time, often their super funds don’t – which could be costing everyday Australians a significant amount in unrealised wealth.
For many, super is a “set and forget” decision. For many more still, it was a decision likely made for them by a previous employer decades ago, and they’ve yet to engage with their fund or understand its investment strategy in a meaningful way.
We know that people's super needs change at each stage of life – and we also know that to achieve the most out of our clients' superannuation and help them retire with more, these needs have to be planned and accounted for.
At Aware Super we tailor our super products to meet individuals' changing needs. This is achieved through our market-leading MySuper Lifecycle default super investment approach, which takes into consideration our clients’ needs, age and life stage. Close to 600,000, or more than 85%, of our super (accumulation) members invest their money in this default fund, and for good reason: it evolves with a person’s changing needs over time.
Best of all, we make this change automatically, so the fund member can continue to “set and forget” if that’s their preference. Here’s how it works:
Grow: Age 16-55
Until age 55, the member is 100% invested in the High Growth option. This phase of the Lifecycle approach is designed to make the most of the potential to grow the balance and maximise returns over the long-term. Investments include a high allocation of growth assets, because at this age, there is plenty of time to ride out market ups and downs.
Manage: Age 56-64
At age 56, we begin making a series of yearly adjustments where we gradually transition the investments away from the High Growth option into the Growth option, and then eventually into the Balanced Growth option. The Growth option aims to generate strong returns, but also includes some less risky assets to cushion investments from short-term dips in the market. The lower risk Balanced Growth option incorporates risk management strategies that aim to mitigate the impact of large market falls, which is crucially important as retirement nears.
By age 65, all funds are 100% invested in the Balanced Growth option. The lower risk profile helps to safeguard savings and provides a more stable ongoing return, as this is a time when many members look to retire or are actively considering it. It’s important to maintain the savings accumulated to date, to allow our members to enjoy their best possible retirement.
Most superannuation funds invest the savings of their default MySuper members in a single investment option, resulting in an investment mix that doesn't change for their members, regardless of their age.
At Aware, by tailoring our products to clients' lifecycle and taking into consideration different life events – from starting out and beginning a relationship, to starting a family, caring for kids or planning for retirement – we embrace a more tailored ‘whole person’ strategy. As an adviser, this approach provides you with increased reasons to engage with your clients experiencing different life events, and also a way to start conversations with new clients depending on their life stages.
By managing the balance between risk and return to suit various ages, we aim to provide a more stable ongoing return in the lead up retirement. Aware Super’s MySuper Lifecycle High Growth option is the no. 1 performer over 3, 5 & 10 years*. Learn more about MySuper Lifecycle.
* as published in the SuperRatings Default Index ↩