Merger puts super on steroids

BANKING and super have joined forces to combine super and bank accounts, in a move that's set to transform the way Australians save for retirement.

Westpac logo /File

Merger puts super on steroids

BANKING and superannuation have finally joined forces in a move that's set to transform the way Australians save for retirement.

Super for Life, a fund from Westpac and BT Financial, manages both your banking and your super in the one place.

Customers will see their super balance alongside their regular deposit, transaction and loan accounts every time they use internet banking.

They can top up their nest egg directly or, for the first time, convert credit card reward points into super contributions.

Melanie Evans, head of Super for Life, says given super represents the biggest chunk of savings most people have it's about time it was on the same page as banking.

"We can't expect people to take ownership of their super and start saving sooner unless we make it easy,'' she says.

"This is about making super part of your everyday financial situation and not just something you hear about twice a year when you get a statement in the mail.''

There's a flat $5 a month administration fee and a competitive management fee of 0.99 per cent.

There's no establishment, contribution, withdrawal, switching or termination fees and, significantly, the product does not pay commissions.

Super investments have also been simplified. You can choose your own from four options (growth, moderate, conservative and super cash) or you can use Lifestage Funds, which automatically adjusts the mix of investments depending on the decade in which you were born.

"The idea is to ensure customers take on growth assets early on in their life when they can afford to take more risk, but then as they move closer to retirement their asset allocation becomes more conservative,'' Ms Evans says.

Jeff Bresnahan, managing director of SuperRatings, says the product takes the commercial sector to the next level.

"We very much like the fact that they've stripped the commissions out of it,'' he says. "People can still go and pay for good advice, but there's no built-in commission for distribution which is a huge positive.''

Alex Dunnin, research director at Rainmaker, describes Super for Life a "revelation''.

"At last a retail group has built a product that integrates the firepower of their web banking, insurance, investments and credit cards,'' he says.

"Being able to link your super to your web banking account and even transfer money just like it's another web bank account is also a breakthrough.

"Even better, they got the pricing right . . . which puts them toe to toe with industry funds and groups like VirginSuper and max Super but supported by the sheer grunt of one of the country's biggest banks.''

However, he says people who want lots of investment choices should consider a different fund.

"This is a simple, direct access and no-nonsense product,'' he says. "The acid test will always still be investment performance, but I look forward to seeing how it delivers.''

Mr Bresnahan agrees people should think carefully before switching, given most are already in well performing funds.

"Just because a new product comes out doesn't mean everyone has to pull up stumps and move across,'' he says.

"This is not a super-strong product across the board, but it has got competitive fees and it's got some good features on it.''

Among them the ability to use credit card points.

"In effect you could convert your points into a $1000 undeducted contribution for a low-income earner and get another $1500 cash from the Government's co-contribution,'' he says. "That 1000 worth of points is now worth $2500.''

BT says by raising super's visibility, it's also hoped young people will take control of their retirement savings earlier.