Choosing a compliant option

The last lesson established that a default option is structurally non-compliant. This one is about the fix, and there are two genuine routes plus one that is usually oversold.

Route one: a dedicated Islamic super fund

A small number of Australian providers run superannuation with Shariah screening applied to the whole investment menu. The site maintains a current comparison of them rather than listing them here, because availability changes and one of them has already paused new members once.

The current comparison, with each provider's trustee, regulator, screening basis and status, is on the super funds page. As of this writing it covers Salaam Super (formerly Crescent Wealth), Hejaz Islamic Super and Pension, and Meezan Wealth Islamic Super, with their structural differences set out. Check it rather than trusting a list here, and always ask for the current Product Disclosure Statement.

What you are buying is that someone else has done the screening, applies it continuously, and takes responsibility for it. What you are paying is a higher fee than a mega industry fund's default, because a smaller member base spreads fixed costs across fewer people and screening plus certification are real recurring costs.

Note that these providers are structurally different from each other in ways the marketing does not surface. One sits inside a mainstream master trust with an APRA-regulated trustee and a screened menu underneath. Another is delivered as a managed discretionary account on a platform rather than as a standalone fund. Those are meaningfully different arrangements, and the question of who the trustee is and what is regulated by whom is worth asking directly.

Route two: member direct inside your existing fund

This is the option most people have never heard of, and for many it is the better answer. Some large super funds let you direct part of your balance yourself: choosing individual shares or ETFs from an approved list, the same way you could inside a personal brokerage account, rather than being confined to the fund's pre-built investment options. You stay in your existing fund, with the same trustee, insurance and administration. Only the portion you direct is invested according to your own screened choices instead of the fund's default mix.

• The case against it: you take on the work. You are now the one screening holdings, monitoring ratios as they move, rebalancing, and handling purification. Member direct usually carries its own additional fee, often has minimum and maximum percentages of your balance, and requires a cash holding to operate, which needs its own thought.

The third route, and why it is usually oversold

A self managed super fund gives you complete control and is sometimes presented as the obvious answer for Muslim investors. It is a real option and occasionally the right one, but the thresholds are higher than the seminars suggest: a practical minimum balance well into the hundreds of thousands before the fixed annual costs stop eating the advantage, plus genuine trustee duties, an annual audit, and personal legal responsibility for compliance.

The full treatment, including real 2026 cost figures, the borrowing problem and the unleveraged screened-share alternative, is in the guide on halal SMSFs in Australia.

Before you switch anything

Switching super is a form, and it is easy. That is exactly why people do it badly.

• Compare total fees, not the headline. Administration, investment, and any member-direct or platform fee, as one number. A dedicated screened fund will usually cost more than a mega fund default, and that difference is the real price of the screen.
• Check the insurance before you move anything. Default cover inside super is often issued with no health questions, and re-applying elsewhere later can cost more or be declined. Never close the old account until the new cover is confirmed in writing.
• Confirm the option is open to new members and request the current Product Disclosure Statement and Target Market Determination. One Australian provider has already paused new sign-ups once.
• Ask what standard the screening uses and who signs off on it. The Shariah-compliant vehicles lesson explained why AAOIFI and MSCI Islamic screens produce different universes. A named standard and a named Shariah board is the answer you want.
• Ask about purification. A fund that screens properly still holds companies with some incidental impermissible income, and it should be able to tell you its purification ratio.
• Do it once, then leave it alone. Switching repeatedly to chase last year's returns is the same behaviour the lesson on time in the market warned about, in a wrapper where you cannot see the damage for thirty years.