How Financial Planners Should Talk to Clients About Switching Industry Super Funds Without Sounding Like They're Bad-Mouthing the Old One

07 October 2026·5 min read

Quick answer: Lead with the client's goals and the data on their current fund's performance, fees and insurance — not with the name of whatever fund you'd prefer they move to. Show your working, name the trade-offs (lost insurance, exit timing, re-underwriting) and let the client see you genuinely considered staying as an option, not a strawman. Document the comparison in the file the same way you would any other recommendation. If the conversation reads like a pitch for one preferred product, rewrite it until it doesn't. 📈

Please note: general information, not legal advice — check current official guidance before relying on it.

Underperformance headlines land in client inboxes long before you get the chance to raise it yourself, and the second you do, there's a real risk it reads as "your fund's rubbish, move to the one I like." That reaction is avoidable — it's almost always about the order you say things in, not the facts themselves.

What most financial planners get wrong

Opening with "your fund is bad" instead of "here's what we're seeing in your numbers."
Naming a preferred replacement fund in the same breath as criticising the current one, which reads as a sales pitch even when it genuinely isn't.
Skipping the cost of switching — insurance re-underwriting, exit timing, time out of the market — because it complicates a clean recommendation.
Not documenting why staying was considered and rejected, which looks worse later than the recommendation itself.
Letting performance league tables carry the whole argument, when fees, insurance and investment mix matter just as much.

A script that puts the client's numbers first

OPENING (goals, not grievance): "Before we talk about your fund, let's revisit what you told me matters most — [retirement age / insurance needs / fee sensitivity]. Here's how your current fund stacks up against that, not against any other fund in particular."

THE DATA (neutral framing): "Over the last [X] years, your fund has returned [X]% against a comparable median of [X]%, and you're paying [X]% in fees. Here's what that's cost you in dollar terms, and what it might cost going forward if nothing changes."

THE TRADE-OFFS (always include): "If we did move, here's what you'd need to weigh up: [insurance re-underwriting, any exit costs, time out of the market during transfer, loss of any fund-specific benefits]."

THE OPTIONS (plural, always): "There are a few ways to handle this — stay and monitor, stay and adjust your investment option within the fund, or switch. Here's what I'd recommend and why, based on what you told me matters."

Tradie client: A 34-year-old electrician's industry fund has underperformed the median for three straight years. Rather than opening with "that fund's letting you down," the planner opens with his stated goal — a house deposit in five years — and shows how the underperformance has quietly cost him toward that, then lays out switching versus adjusting his investment option inside the same fund.

Nurse with built-in cover: A client in healthcare has strong TPD and income protection built into her underperforming industry fund. The planner flags upfront that any switch means re-underwriting that insurance from scratch, which at her age and health history could cost more or carry new exclusions — so the recommendation weighs the insurance loss explicitly rather than glossing over it.

Café owner nearing retirement: Five years out, fee-sensitive, and sitting in a serial underperformer. The planner shows two numbers side by side — total fees under a switch versus total underperformance cost if he stays — so the decision is visibly about his numbers, not the planner's fund preference.

How to document it for best-interests purposes

Record what the client said mattered to them, before you show any comparison.
Keep the comparison fund-agnostic where possible — benchmarks and categories, not just "Fund A vs Fund B."
Note explicitly that staying was considered as an option, with reasons for and against.
Check current ASIC guidance on best-interests duty documentation before finalising your SOA wording — this is detail worth getting right, not a shortcut to skip.

💡 Heads up: If your SOA template defaults to naming your "preferred" replacement fund before it's finished explaining why the current one underperformed, a client reading in order sees the pitch before the problem. Reorder it.

Mistakes to avoid

Relying only on recent returns without checking if it's a short-term blip or a structural issue (fees, mix, insurance loading).
Letting the recommendation look inevitable — always show "stay" as a genuinely live option, even when you don't recommend it.
Forgetting to mention insurance inside the old fund until after the client has already agreed to switch.
Using emotive language about the old fund ("letting you down," "failing you") instead of neutral, numbers-first language.

Frequently asked questions

Is it ever okay to recommend a specific replacement fund?

Yes, once you've shown the comparison and the trade-offs. The issue isn't naming a fund, it's naming it before the client has seen why, or doing so with nothing but your own preference backing it.

What if the client's current fund really has been consistently bad?

You can and should say so plainly, with the data to back it. Honest nuance: being straight about genuine underperformance isn't bad-mouthing a fund, it's doing your job — just keep the language factual rather than editorial.

Do we need to compare against every alternative fund on the market?

No, and trying to is often what makes these conversations drag on. Check current ASIC guidance on what a reasonable comparison looks like, and focus on the handful of options that genuinely fit the client's goals.

How do we handle a client who wants to switch based on a mate's recommendation, not ours?

Walk them through the same framework you'd use for any switch — their goals, the data on the fund they're considering, and the trade-offs — so the file shows full consideration either way, not just a rubber stamp on a decision made over a barbecue.

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