Satisfaction with super fund falls while Royal Commission looking at sector

Consumer satisfaction with the financial performance of their super funds has fallen at the same time as the Banking Royal Commission was holding hearings into the sector.

Comparing statistics released by Roy Morgan Research for August 2018 to figures for June 2018 finds there was generally a fall in consumer satisfaction with the performance of their funds, particularly for people with larger balances, over the period. The Banking Royal Commission held its first public hearing in March 2018, but held the hearings into superannuation in August.

For balances over $700,000 satisfaction for industry funds fell 2.6% and retail fund satisfaction fell 2.10%. For balances between $250,000 and $699,000 industry fund satisfaction was down 1.6% and retail funds were down 0.70%.

There was an increase in satisfaction for balances under $100,000 – excluding retail fund balances under $5,000.

The financial performance of super funds so far in 2018/19 has been “good”, according to Chant West. The firm found that the ‘median growth fund’ was up 1.1% in July 2018, and up a further 1.0% in August.

Roy Morgan Research does note that overall satisfaction with the financial performance of super funds has increased over the 12 months to August 2018. Satisfaction with industry funds stood at 62.1%, up 3.9%, or 59.2% for retail funds, up 0.9%. Though at higher balances retail funds also fell – down 3.5% (to 75.8%) for balances over $700,000 compared to an increase of 6.4% (to 84.9%) for industry funds.

“Despite significant adverse publicity given to the superannuation industry as a result of the finance Royal Commission, satisfaction with superannuation has actually improved over the last twelve months and is currently well above the average of the last decade,” said Roy Morgan Industry Communication Director Norman Morris,

“Superannuation satisfaction is a vital part of understanding the behaviour of members as it is unlikely that the majority will be actively engaged enough to be reading performance tables. It is more likely that it is how they feel regarding the performance of their fund that will ultimately determine their actions.”

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