Changing super funds can sometimes make sense. But a lower fee, stronger recent return or persuasive sales pitch doesn't necessarily mean another fund is right for you.

ASIC continues to warn Australians about high-pressure sales tactics and advice models that encourage people to move their super into complex or higher-risk investments.

Before switching, it is worth understanding what you already have, what you are moving to and what could change along the way.

Why is ASIC concerned about super switching?

ASIC has identified practices where consumers are encouraged to switch super after responding to online advertising, comparison websites, unsolicited calls or offers for a free super review.

Some of these approaches use lead generation businesses to identify potential clients before referring them to financial services businesses.

Lead generation itself is a marketing practice and isn't automatically a problem. ASIC's concern is with practices that use misleading claims, high-pressure tactics or inappropriate advice to encourage people to move their retirement savings.

ASIC has identified cases where people were moved into complex or high-risk investments, paid significant fees or received advice that didn't adequately consider their circumstances.

Start by understanding what you already have

Before comparing another fund, look at your existing super arrangements.

This includes more than checking the current account balance.

Consider:

• the fees you're currently paying;
• your investment options and their level of risk;
• long-term investment performance rather than a single year;
• insurance held through your super;
• services and features available through the fund; and
• whether changing funds could create transaction, advice or other costs.

Moneysmart recommends comparing funds carefully before switching rather than considering one feature in isolation.

Don't overlook insurance inside super

One issue that can be easy to miss when switching is insurance.

Your existing super fund may provide life, total and permanent disability or income protection insurance. Moving your entire balance to another fund could result in existing cover ending.

Replacement insurance may have different premiums, exclusions, waiting periods, definitions or eligibility requirements. Depending on your circumstances, equivalent cover may not be available.

Before cancelling an existing super account, check what insurance you currently hold and what will happen to it if you move your money.

Compare performance over an appropriate period

Investment performance matters, but recent returns alone don't tell you whether a fund is suitable.

Super is generally a long-term investment. Comparing one fund's recent return with another fund that has a different investment strategy or risk profile may give a misleading impression.

Moneysmart recommends considering performance over at least five years and comparing similar investment options.

Fees should also be considered alongside performance. Higher fees can reduce retirement savings over time, but the lowest-cost fund isn't automatically the best choice for every person.

Be particularly careful with unsolicited approaches

A super conversation may begin with a social media advertisement, online comparison tool, competition entry or unexpected phone call.

You may then be offered a free review or told that your current fund isn't performing well enough.

ASIC says some lead generators obtain consumer information through third-party data sources or online activity before contacting people about their super.

If someone you don't know contacts you about switching your super, you don't need to continue the conversation. You can independently research your existing fund and other options without using the service being promoted to you.

Check who is giving you financial advice

If someone recommends that you switch super funds or invest your retirement savings in a particular product, check who is providing the advice.

ASIC's Financial Advisers Register can be used to check whether a financial adviser is registered and view information including their experience, qualifications and the Australian Financial Services licensee they operate under.

Be cautious if the person making the initial recommendation isn't the adviser you eventually speak with, or if you're being asked to approve documents before you've had enough time to understand the recommendation.

Switching isn't always the answer

There are legitimate reasons to change super funds. Your employment, investment preferences, fees, insurance needs or retirement plans may change over time.

But switching is only one option. Staying with your existing fund may also be appropriate.

The decision should be based on your circumstances and a meaningful comparison of what you have now against what you're considering moving to.

If you're reviewing your super as part of your broader financial planning, consider how the decision fits with your retirement goals, investment strategy, insurance needs and other financial arrangements.