Only 18.5% of super fund members are ‘very satisfied’ with their fund, down from 19.0% a year earlier, according to the latest satisfaction survey by Roy Morgan Research.
In the six months to November 2016 industry funds maintained their satisfaction lead compared to retail funds – 59.2% to 56.7%. Though both fell compared to 12 months earlier, down 1.2% and 1.4% respectively. However industry funds only score 17.7% for ‘very satisfied’ and 16% for retail funds.
This contrasts to the 74.3%, up 1.7%, satisfaction for SMSFs and 69.8%, up 1.8%, for public-sector super funds. These types of funds also have much higher ‘very satisfied’ members – at 32.7% and 28.5% respectively.
“These funds have had a clear lead over retail and industry funds for more than 10 years due mainly to the fact that their members have higher average balances, which are generally associated with higher satisfaction levels regardless of the fund type,” said Roy Morgan.
“Public sector funds are also likely to have higher satisfaction due to additional benefits as a result of government funding, guarantees and conditions that generally don’t exist with other funds.”
Roy Morgan noted that the three super funds with the highest proportion of ‘very satisfied’ members – State Plus, QSuper and CARE Super – were also the top three funds for members who said there was a ‘very high’ likelihood of recommending the fund.
“Although satisfaction with financial performance of superannuation funds is close to the highest it has been since 2008, it is still very low at only 58.4%. If this wasn’t cause enough for concern, less than one in five members consider themselves ‘very satisfied’,” said Norman Morris, Industry Communications Director with Roy Morgan Research.
“This suggests that most fund members are not very committed to their current fund, and could be persuaded to switch funds when they change employers or if their financial advisor recommends it. Another consequence of low satisfaction is that only around one quarter of fund members have a ‘very high’ likelihood of recommending their fund to others, which can restrict membership growth in the longer term.”
“Also significant is the fact that satisfaction among industry-fund members has remained ahead of retail funds for many years, and they both pose a real threat to self–managed funds where high satisfaction is linked to high balances rather than who manages the funds.”
“The current government’s extensive rule changes to superannuation and pension eligibility are already creating considerable uncertainty among superannuation members about the future of the system. Combined with the likelihood of increased market volatility and relatively low satisfaction with financial performance of funds, this has the potential to reduce member confidence which is essential in such a long term investment.”