5 mins read
Key Takeaways
- Most Australians benefit from consolidating super funds but not always
- Multiple super funds can be used strategically for investments and insurance
- Fees and duplicate insurance are the biggest risks to watch
- A clear financial plan is essential when managing multiple funds
- Professional advice can help ensure your super supports your long-term goals
Many Australians are told to consolidate their superannuation into one account and in most cases, that’s good advice. However, there are situations where holding multiple super funds strategically can actually provide benefits. The key is understanding when it makes sense and when it doesn’t. With the right financial planning strategy, multiple super accounts can be used to manage risk, optimise insurance, and improve flexibility. Without a plan, however, they can lead to unnecessary fees and lost retirement savings.
Should You Have More Than One Super Fund?
For most people, having multiple super funds is unintentional, often the result of changing jobs over time. This can lead to:
- Multiple sets of fees
- Duplicate insurance premiums
- Difficulty tracking performance
That’s why many Australians are encouraged to consolidate. However, in certain situations, keeping more than one super fund can be a deliberate and strategic decision particularly when guided by a professional through structured financial planning.
When Multiple Super Funds Can Be Beneficial
While consolidation is often the default, there are scenarios where maintaining multiple super accounts can work in your favour.
1. Separating Investment Strategies
Some individuals choose to use different super funds to support different investment approaches. Rather than relying on a single strategy, this allows them to separate how their super is invested across multiple accounts. For example, one fund may be allocated toward high-growth investments aimed at long-term wealth accumulation, while another may be structured more conservatively to help preserve capital and reduce volatility. This approach can help balance risk across your overall retirement strategy, particularly if you want greater control over how your super is invested and how it evolves over time.
2. Managing Insurance More Effectively
Super funds often include default insurance such as life cover, TPD (Total and Permanent Disability), and income protection. In some cases, keeping multiple super funds may allow you to:
- Retain favourable insurance terms
- Avoid reapplying for cover (which may be harder with health changes)
- Maintain specialised policies across different funds
However, it’s important to ensure you’re not paying for duplicate or unnecessary cover, which can erode your super balance over time.
3. Accessing Different Investment Options
Not all super funds offer the same range of investment choices, which is why some individuals choose to maintain more than one account. By doing so, you may gain access to a broader mix of opportunities across different asset classes, sectors, and investment styles.
This can include exposure to direct investment options such as shares or ETFs, as well as thematic or specialised strategies that may not be available within a single fund. When used effectively, this approach can enhance diversification across your overall portfolio. However, it also requires careful oversight to ensure your investments remain aligned with your long-term goals and are not unnecessarily duplicated.
4. Transitioning Between Strategies Over Time
Some people use multiple super funds temporarily as part of a transition strategy.
For example:
- Moving from a high-growth portfolio to a more conservative one
- Testing a new fund before fully consolidating
- Gradually shifting investment allocations
This can help reduce risk during key life stages, such as approaching retirement.
The Risks of Having Multiple Super Funds
While there can be benefits, holding multiple super funds without a clear strategy can create problems.
1. Higher Fees
Each super account typically charges administration and investment fees. Multiple accounts can mean multiple layers of fees, which reduce your long-term returns.
2. Duplicate Insurance Costs
Many super funds automatically include insurance as part of their offering. While this can be beneficial, having multiple super accounts may mean you’re unknowingly paying for overlapping cover across different funds. This can include multiple life insurance policies, multiple Total and Permanent Disability (TPD) policies, and multiple income protection policies, all running at the same time.
Over time, these duplicated costs can add up quickly and reduce your overall super balance. Without regular review, you may be paying for cover you don’t need or that doesn’t align with your current circumstances.
3. Complexity and Lack of Visibility
Managing multiple super funds can make it harder to:
- Track performance
- Monitor asset allocation
- Stay aligned with your long-term goals
Simplicity is often one of the biggest advantages of consolidation.
When You Should Consider Consolidating
For many Australians, consolidating super is still the most effective option, particularly if you have multiple accounts from previous jobs, are paying unnecessary fees, or hold duplicate insurance cover. It can also simplify your finances by making your super easier to manage and track over time.
However, before consolidating, it’s important to carefully assess the potential impact. This includes checking whether you may lose valuable insurance cover, reviewing any exit fees or tax implications, and comparing the investment performance of each fund. Taking the time to evaluate these factors ensures you make an informed decision. If you’re unsure, our broader services can help you determine whether consolidation or a multi-fund strategy is the right approach for your situation.
How a Financial Adviser Can Help
Using multiple super funds strategically requires careful planning. Without guidance, it’s easy to lose more in fees than you gain in flexibility.
A financial adviser can help you:
- Review your existing super funds
- Identify unnecessary duplication or costs
- Align your super with your long-term goals
- Build a strategy that balances growth, risk, and protection
Most importantly, they ensure your super is working as part of your overall financial plan, not in isolation.
Strategy Over Simplicity
Having multiple super funds isn’t inherently good or bad, it depends on how they’re used. For many people, consolidation provides simplicity and cost savings. But for others, a carefully structured multi-fund approach can offer greater flexibility and control.
The key is having a clear strategy behind your decision. If you’re unsure whether to consolidate or maintain multiple super accounts, it may be worth reviewing your situation with a professional. You can contact the Pursue Wealth team to discuss how your super strategy fits into your broader financial plan.
