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And the winners are
The Australian Government EmployeesSuperannuationTrust (AGEST) has emerged a substantial winner in the latest Heron Quality Star Ratings released by Melbourne-based research house, The Heron Partnership.
The Quality Star Ratings, released in late January, deemed AGEST the best value for money product among superannuation funds and master trusts operating in the retail arena.
According to the managing director of The Heron Partnership, Chris Butler, Australia’s choice of superannuation fund environment has led to increased competition between funds and a dramatic improvement in the types of products and services being offered.
However, this, in turn, had altered the performance of funds rated with the Heron formula.
“The increase in product features, improvement in services and the additional costs incurred in promoting funds has resulted in many funds increasing their management and/or investment costs,” Butler said. “When fees are taken into account, of the retail products awarded five Heron quality stars, AGEST represents the best value for money.”
However, while AGEST may have finished at the top of the tree, it did so in good company, with 26 other retail products also scoring the top Heron rating (see table).
An interesting facet of the 2007 Heron Quality Star Ratings is that of the top 10 rated retail funds, there were four commercial master trusts and six industry funds, while within the top 10 rated corporate products there were eight commercial master trusts and two industry funds.
Butler said the superannuation market has become very competitive, and those products that had earned the five star rating had been deemed to have a strong market presence due to the overall quality of service they provided and the package of features they made available.
He said the judging criteria took account of funds that offered:
* a good range of multi-manager investment options that accommodate the conservative through to the very aggressive investor;
* a range of single manager diversified and sector only investment options to accommodate the investor who wants to be more involved in the investment manager selection;
* good comparative investment performance;
* an easy to understand, transparent and competitive fee structure;
* the inclusion of a range of ancillary benefits, such as discounted housing loans, credit cards and travel;
* good access to information, education and advice for the investor through call centres, email contact, website, written communications and financial planners;
* a range of insurance options to cover death, total and permanent disability and salary continuance arrangements; and
* few restrictions that have the potential to limit an investor’s options (such as minimum contribution requirements, overbearing health evidence requirements, etc,).
The Heron Quality Star Ratings awarded five stars for “outstanding” performance against the company’s criteria, four stars for “commendable”, three stars for “good”, two stars for “poor” and one star for “unacceptable”.
While most funds will be happy to find themselves in either of the five or four star ratings categories, a number of larger funds might feel unhappy to have been left out of the highest possible category.
Among the notable funds and master trusts to be awarded the “commendable” four stars were Unisuper, MLC Masterkey Super and BT LifetimeSuper.
AUTHOR
Mike Taylor
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