Retail superannuation funds now have higher consumer satisfaction than industry super funds, for the first time in over a decade.
Satisfaction with retail super funds was at 60.0% in March 2017 (up 3.0%), compared to 57.3% for industry super funds (down 3.2%), according to a Roy Morgan Research survey. Industry super funds had maintained a satisfaction lead over retail funds since at least March 2003 – when the survey was first conducted.
Roy Morgan Research suggested the change in may be due to investment performance.
“Retail funds appear to be more sensitive than industry funds to movements in the ASX, as shown by the fact that they reduced the gap in satisfaction to industry funds considerably between 2012 and 2015, coinciding with a 48.3% increase in the ASX. The relative improvement in retail fund satisfaction over the last year is therefore likely to be partly as a result of a strong performance by the ASX which was up around 17% over this period.”
SMSFs remain the type of super fund with the highest satisfaction, at 76.2% (up 2.6%), followed by public sector funds at 68.6% (up 1.7%). However Roy Morgan Research notes that consumer satisfaction with superannuation funds is “very skewed to the top end” and they can’t be treated as a uniform group.
Though retail super funds now lead industry super funds in overall satisfaction, this is only for balances under $100,000. Industry super funds still have higher satisfaction for balances above this level.
“Although satisfaction with retail superannuation funds is now higher than industry funds for the first time in over a decade, it is important to recognise that this has mainly been as a result of gains among lower value clients,” said Norman Morris, Industry Communications Director for Roy Morgan Research.
“This is possibly due in part to the introduction of the no-frills, low-cost MySuper products over recent years which appears to be mainly impacting on the less engaged, lower value customers who didn’t actively select an investment option but are now more satisfied with their returns,” he said.
The Roy Morgan’s Single Source survey is based on more than 50,000 consumers, which includes over 30,000 superannuation fund members.