Industry super funds and SMSFs both outpace retail super funds in consumer satisfaction with their financial performance.
Figures released by Roy Morgan show that retail funds lag behind other types of super funds in terms of consumer satisfaction with financial performance. When comparing industry and retail fund the gap is actually getting wider – industry funds improved their overall satisfaction by 0.9% (to 62.1%) over the twelve months to February 2019, while satisfaction with retail funds fell 3.5% (to 55.7%).
Movement in the satisfaction with SMSFs was mixed. Overall satisfaction was down 0.1% to 73.4%, but this includes +3.6% for balances $250,000-$699,999 and -3.1% for balances $100,00-$249,999. Though Roy Morgan doesn’t show any satisfaction figures for SMSFs under $100,000.
SMSFs have the highest satisfaction amongst super balances of $700,000 and over. Industry funds have the highest satisfaction from $0 to $699,999, while retail super funds have the lowest across all super balances.
Roy Morgan notes that balances over $100,000 are particularity important for the super industry, as they hold 89% of all super money but across only 47% of the fund members.
“With the growing strength of industry funds, concerns have been raised that the unions may use this strength to impact company decisions. According to the latest APRA data, industry funds currently have balances of $629.6 billion or 23.7% of the total market and have now passed the $589 billion in retail funds,” said Norman Morris, Industry Communications Director with Roy Morgan.
“The biggest segment of the market according to APRA is in fact the self-managed group with current balances of $726.5 billion or 27.4% of the market. This segment is likely to face reduced returns if there is a change of Government at the next election and if Labor implements its Franking Credits policy.”
“Despite the regular publication of superannuation performance tables, it is unlikely that the majority of members will be engaged enough to follow them closely but rather act or not on how satisfied they are with the performance of their fund. Our research has highlighted the need to measure members’ satisfaction with performance overall and by account balance across all major competitors.”
“The fact that retail funds now trail industry funds in terms of member satisfaction with performance across all segments, is a major challenge for them as they now face completion from both SMSFs for higher balances and industry funds across all segments.”