Heron Quality Star Ratings Announced for 2007

Released: 28 January, 2007

Insurance the “dramatic improver” as superannuation competition heats up

The Heron Partnership has announced the Heron Quality Star Ratings for 2007 for both Corporate and Retail superannuation products. Of the 122 individual products assessed the highest award of 5 Stars went to 25 Corporate products and 28 Retail products.

Chris Butler, Managing Director of The Heron Partnership said, “It is clear from the assessments we have undertaken that many products have introduced improvements to existing features and/or entirely new features. In the “choice of fund” regime we now have there is far greater competition between funds to retain and gain members.”
 

The main improvements to funds over the past 12 months have been:
 

• A dramatic improvement in the insurance arrangements offered, including the levels of cover, automatic cover provisions and cost reductions;
• Additional investment options, covering both multi-manager and single manager options;
• More "user friendly" web sites offering additional features;
• Additional ancillary benefits being offered, such as discounted health insurance and discounted shopping services;
• Improved communications and education services.
   

Mr Butler said “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. When fees are taken into account, of the Retail products awarded 5 Heron Quality Stars AGEST represents the best “value for money”.

The funds rated as “outstanding quality” and therefore awarded with 5 Heron Quality Stars are (in alphabetical order):

Corporate Funds

• AMP Custom Super
• AMP SignatureSuper
• ANZ Super Advantage
• AON Master Trust
• Asgard Employee Super
• AustralianSuper - Corporate
• Aviva Navigator Super Solutions Employer Service
• AXA Super Directions For Business
• BT Lifetime Super - Employer Plan
• CARE Super – Corporate
• Colonial First State FirstChoice Employer Super
• EquipSuper – Corporate
• ING Corporate Super
• ING Integra Super
• IOOF LifeTrack - Corporate
• IOOF Portfolio Service Employer Superannuation
• Legg Mason - The Corporate Superannuation Master Trust
• Mercer Smart Super
• Mercer SuperTrust
• MLC Masterkey Business Super
• Plum Superannuation Fund
• Retail Employees Superannuation Trust – Acumen
• Russell SuperSolution – Corporate Division
• SMF Spectrum Super
• SunSuper - Corporate

Retail Funds

• AGEST
• AMP Flexible Lifetime Super
• AON Master Trust - Personal Division
• Asgard Elements Super - Pension
• Asgard eWRAP Super - Pension
• ASSET Super
• AustralianSuper - Personal
• Australian Super - Workplace
• Aviva - Navigator Personal Retirement Plan
• AXA Generations
• AXA Summit
• Care Super - Workplace
• Care Super - Personal Plan
• Cbus Super
• EquipSuper Personal
• Finsuper (a division of AustralianSuper)
• Health Super
• HOSTPLUS Personal Super
• HOSTPLUS Workplace Super
• IOOF Portfolio Service Personal Superannuation
• MTAA Superannuation Fund
• Plum Superannuation Fund - Personal Division
• Retail Employees Superannuation Trust – Workplace
• Retail Employees Superannuation Trust - Personal
• SMF Spectrum Super - Personal
• Sunsuper - Personal
• Sunsuper - Solutions
• Westscheme Superannuation Fund

When releasing the ratings for 2007, Mr Butler, said “The primary goal of the Heron Quality Star Ratings is to provide a realistic and objective representation of the strengths and weaknesses of a product. The ratings are based on feature specific benchmarks which guide Heron’s assessors to rate the feature objectively, with all products therefore being rated on the exact same basis. The ratings for each feature are aggregated to an overall numeric rating for each product. The Top 10 rated Corporate products comprised 8 commercial master trusts and 2 industry funds, whilst the Top 10 rated Retail funds included 4 commercial master trusts and 6 industry funds.”

Mr Butler said, “Our extensive product research and assessments are provided through our Heron Advisor internet based research service. This research service has been embraced by the significant number of financial planners that today have access to Heron Advisor research, as a tool to assist them with super “choice of fund” advice”. This service saves considerable time and cost for planners and para-planners when producing SOA’s.

The superannuation market is very competitive and those products awarded with 5 Heron Quality Stars have a strong market presence due to the overall quality of the service they provide to their clients and the package of features they invariably offer to meet the needs of their clients, including:

• A good range of multi-manager investment options that accommodate the conservative through to the very aggressive investors;
• 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 a call centre, email contact, website, written communications and financial planners;
• A range of insurance options to cover death, Total and Permanent Disablement and Salary Continuance arrangements;
• Few restrictions that have potential to limit an investor’s options (such as minimum contribution requirements, overbearing health evidence requirements etc).

"Since the launch of the Heron Quality Star Ratings in June last year Product Issuers have been enthusiastic about our choice of “stars” as the basis of our rating system due to their universal meaning and acceptance and also the rigor of our analytical approach to assessing products" Mr Butler said.

The Heron Quality Star Ratings have 5 levels as follows:
 

• 5 Stars - Outstanding
• 4 Stars - Commendable
• 3 Stars - Good
• 2 Stars - Poor
• 1 Stars - Unacceptable

Heron utilises a holistic methodology to assess and rate the various components of a superannuation fund, grouped under 5 Areas of Importance developed by Heron of Investment Arrangements, Contributions, Ancillary Benefits, Communications and Insurance. Heron assesses about 150 features under these Areas of Importance.

Details of the Heron Quality Star Ratings, including the assessment methodology and products awarded with 5 Heron Quality Stars, are featured on The Heron Partnership’s web site. In addition, through the Heron Advisor service, subscribers are able to access the Quality Star Rating for all products as well as the detailed product research.

“Due to the complexities and issues involved, we believe it is important to seek financial advice from an appropriately qualified financial adviser, no matter the type of product being considered,” Mr Butler concluded.