Satisfaction with retail superannuation funds have consistently lagged industry super funds. But a recent consumer survey has found the gap is the narrowest it has been over the last five years.
In the six months to August 2015 satisfaction with retail super funds was 58.9%, compared to 59.6% for industry super funds.
“Retail fund satisfaction appears to be more sensitive to stock market fluctuations, as shown by the dramatic drop experienced in 2012 and the strong recovery since then which coincides with the improvement in the stock market,” said Roy Morgan Research.
“In the six months to December 2012, industry funds held a 7.7% point lead in satisfaction over retail funds and in the six months to August 2015 this has declined to only a 0.7% point advantage.”
Satisfaction with retail or industry super funds also varies depending on the size of superannuation balances. People with less than $5,000 in super and people with more than $700,000 have higher satisfaction with retail funds. However Roy Morgan notes that balances below $5,000 “accounts for only 0.2% of total superannuation balances.”
Consumer satisfaction: industry funds v retail funds
|Account Balance||Industry Super Funds||Retail Super Funds||Difference|
|< $ 5,000||44.40%||48.90%||-4.50%|
|$ 5,000 – $ 99,999||56.90%||52.80%||4.10%|
|$ 100,000 – $ 249,999||69.90%||63.20%||6.70%|
|$ 250,000 – $ 699,999||73.50%||71.10%||2.40%|
|$ 700,000 >||77.60%||81.10%||-3.50%|
Data source: Roy Morgan Research
Satisfaction with both industry and retail funds also increases alongside increases in account balance.
However “satisfaction with self-managed funds in the $250,000 and over group is 77.7%, ahead of industry funds (74.0%) and retail funds (72.9%).”
“With intense competition between retail super funds and industry funds, it is important to understand what fund members think regarding the financial performance of the two groups. It is ultimately the members who will decide where their funds are best directed,” said Norman Morris, Industry Communications Director for Roy Morgan Research.
“Of particular significance is the fact that industry funds have now only got a narrow lead in satisfaction over their retail rivals to the point where their strong market positioning on this has been largely dissipated. It is important to note that both groups face potential losses to self-managed funds from their higher value members if satisfaction levels decline.”
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