CFS FirstChoice Wholesale Personal Super

We assessed whether the fees and costs paid by FCWS members (administration fees, and total fees & costs) are competitive. In doing so, we used segmented member data to evaluate the fee and cost outcomes across the membership. 

An analysis using industry research house data showed that 100% of FCWS members are paying administration fees that are below median, making it amongst the cheapest within the superannuation industry.  

The total fees and costs that members pay vary, depending on the investment options chosen. Using industry research house data we found that more than 72% of FCWS members are paying total fees which are ‘at median or cheaper’. An analysis based on funds with similar size, type and membership base, noted in APRA’s Annual superannuation statistics, indicated that the total fees and costs for more than 95% FCWS investment options were “at median or better”. 

We assessed the level of investment returns delivered to members after the deduction of fees, costs and taxes. 

Using industry research house data, when compared to investment options with comparable risk profiles and asset classes, we determined that more than 85% of FCWS investment options achieved investment returns that were ‘at median or better’ over 1, 3, 5 or 7 years. 

Using industry research house data, when compared to investment options with comparable risk profiles and asset classes, it was identified that more than 87% of FCWS investment options achieved an investment risk ranking that were ‘at median or better’ over 1, 3, 5 or 7 years. 

We worked with an independent research house to benchmark the quality of our member services against 40 key industry peers. The overall finding of the review was that FCWS member services are ranked better than the median.

We assessed the performance of each investment option, having regard to the stated investment objective and investment ratings given by various research houses. We also considered the suitability of the composition of the investment menu for members. 

The investment menu of FCWS is large compared to other master trust super funds, allowing members an extensive range of investment options to select and build a diversified portfolio. 

We determined that more than 81% of investment options delivered upon (and are expected to continue to deliver upon) their stated investment objectives over their stated investment timeframe. It was identified that more than 91% of ‘on-menu’ investment options meets or exceeds the ‘Investment Grade’ ratings by various research houses.  

To evaluate the appropriateness of the insurance strategy for FCWS, we used AIL’s Annual Insurance Review for 2023 which was conducted by an independent research house. The report concluded that overall the FCWS insurance offer is providing value for money and appropriately supports wealth protection needs of the members.  

The Terms and Conditions of the FCWS insurance offer were benchmarked against comparable insurance plans and found to be quite reasonable and competitive with other funds. 

AIL’s Annual Insurance Review for 2023, found that more than 80% of FCWS members for paying Death, Total and Permanent Disability and Income Protection Cover, that is at median or cheaper in comparison to the industry/peers. 

Scale is important as it allows AIL to meet its commitments and negotiate competitive arrangements for members. As at 30 June 2023, based on APRA’s Annual fund-level superannuation statistics, AIL was the 7th largest provider of superannuation in Australia with total super assets of approximately $110 billion and a membership of approximately 821k members.  

As at 30 June 2023, FCWS had superannuation assets of $38.2 billion and a membership of 243k members. The cost to income ratio of FCWS was assessed as being sufficient.  

More than 94% of FCWS investment options held assets of more than $30m and therefore did not have any imminent last man standing risk. 

As at 30 June 2023, based on APRA’s fund level data, AIL’s superannuation operating cost ratio was ranked among the lowest in the industry (1st quintile). AIL’s operating costs have increased over the last few years due to regulatory compliance and aging infrastructure costs. However, a number of projects are underway to further automate and streamline our processes, and improve our technology platforms, which are expected to stabilise AIL’s operating costs in the longer term. 

Dividend payments that were paid to our parent companies were made in accordance with AIL’s Capital and Dividend Policy, which requires that the amount and timing of any dividend is consistent with AIL’s fiduciary duties and members’ best financial interests. 

We confirmed the appropriateness of each category of fee and cost charged to members.  

The fees and costs paid by FCWS members were assessed as being sufficient to cover the costs of the product and that the manner in which fees and costs are charged to members is appropriate.