Banks continue to offer benefits to businesses to encourage them to switch default superannuation funds for their employees and it appears to be producing results, according to research released by Industry Super Australia.
“The results clearly show that the banks continue to be active in recommending default funds to SMEs, and that they continue to offer SMEs benefits for switching their default funds,” says the report prepared by UMR strategic research.
This latest research follows from a 2014 survey, also conducted by UMR, which showed that 26% of employers surveyed said a bank had approached them about switching default super funds, and of these 43% had been offered a benefit for switching.
The 2016 survey, which was recently released, again found that 26% of all respondents had been offered or recommended by their bank to switch default super funds. 30% of all ‘Big 4’ customers said they had been recommended to switch default super funds, compared to 28% in 2014.
Roughly the same proportion of employers said they had been offered a benefit for switching default super funds. 45% of employers who had been recommended to switch default funds had been offered a benefit, compared to 43% in 2014.
However banks may be better targeting the benefits offered.
“There are indications (based on a small sample size) that they may be becoming more efficient at choosing benefits that appeal to SMEs,” says the report.
The most common benefit offered was a discount on the fees of the superannuation product, at 51% (up 13% since 2014). The second most common benefit was free financial advice for the business, at 49% (up 25%). The offering of lower insurance premiums for the business, free or discounted IT products and free tickets to sporting events all declined.
The research report also suggests these changes may be producing results, with 60% of those offered a benefit in 2016 switching, compared to 33% in 2014.
“Few of those who have been offered benefits to switch have declined, and the proportion accepting the offer has increased (based on a small sample size).”