4 Things to know about your GESB account

Being that I am based in Perth I often see clients who have a GESB Super account. There is often a misconception that this fund is a great one. In years gone by I would have agreed somewhat, BUT things change over time and other super funds get better. Below I go through four reasons why you should re-evaluate your GESB super fund.

1. Fees

Currently (2020) GESB Super would cost you twice as much in fees as some other super funds. What has happened over the years, is that many super funds pricing (fees) has become extremely sharp, to the point where they are half the fees of a GESB account. There is a lot of competition out there, and because GESB are closely aligned with the WA Gov’t then they have no problems with having people setup new accounts, so as far as GESB are concerned they don’t have to worry about competition. I think this relates to their fees.

2. Returns 

As it stands today the returns of both GESB Super & Westate super are OK, but not great. Looking at the performance of other funds, to me it looks like they have been underperforming. Why this is the case, I’m not sure. When I compare the returns to some of the portfolios I construct there is a difference in long term performance of 1.50%. That kind of difference can be big dollars over the long-term. The caveat to this, is that past performance won’t necessarily relate to future performance, but it sure does raise some eyebrows.

3.  Insurance

This is a big issue for me. The quality of insurances obtained via most Super Funds is poor. Any wealth plan should have an insurance plan as the backbone of any strategy. It is your ‘plan B’ if something were to go wrong, and protects yourself and family from financial devastation. As a general comment your cover under GESB will likely have insufficient levels of cover, be harder to qualify for under a claim, and particularly with their life and total & permanent disability (TPD) it will be much more expensive than your other options.

4. No Beneficiary nomination

In the event of death most super funds allow you to nominate who your funds go to. For most people is will be their spouse. Having a Binding Beneficiary nomination means the super & insurances held under the super account can be paid straight away. As GESB do not allow a beneficiary nomination it means it has to pass through to your estate and administered via your Will. This process can take up to a year. If you don’t have a Will it will take even longer.

After reading the above four points and feeling like you need to address these issues, please make contact with myself. I can certainly present a better solution overall, which can set you on the right path to building more wealth and protecting your finances.

For more information please read my article about beneficiary nominations and GESB Fees & performance.