Australians do not trust banks to manage their super

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A new poll shows that seven out of 10 Australians do not trust banks to manage their super, with consumers saying that they want their interests looked after rather than those of the shareholders.

The Essential poll over 1000 people was conducted on behalf of Industry Super Australia. Results of the poll revealed that just 31 per cent of Australians have any trust that banks could ensure that the superannuation system works fairly. Two-thirds of those surveyed want super to operate on a not-for-profit basis, with all returns going to fund members.

The poll also revealed that 38 per cent of those questioned trust the Federal Government with their super, compared to a whopping 69 per cent who trust Industry Super Funds.

The results of the poll send a clear message that, when it comes to super, Australians want their interests to be the sole focus of their funds, rather than a profit-making venture for banks. In fact, 58 per cent of respondents believe that the banks would use the superannuation system to exploit fund members.

“When it comes to super, the banks are legally required to act in the best interest of their customers; most Australians don’t believe they do,” said Industry Super Australia Chief, David Whiteley.

“Consumers know aggressive cross-selling of advice, insurance and super is designed to boost shareholder profits rather than leave them better off.

“The banks’ relentless lobbying to remove consumer default protections could result in people ending up in under-performing funds and a nest egg that’s tens, even hundreds, of thousands of dollars short.

“Australians have told us what they think – they don’t trust the banks and believe their culture and profit motive are at odds with the purpose of super.”

Two-thirds of respondents said that the banks were already too powerful and that giving them power of superannuation would make the situation worse.

“Public opinion clearly runs counter to the banks’ efforts to change the super system to suit their vertically integrated business models. Astute policymakers will be listening,” said Mr Whiteley.

Opinion: What have banks done to earn our trust?

The results of this survey should come as no surprise. Think rate cut delays, dodgy financial advice and limited customer service and ask: what has my bank done to earn my trust?

The 2016 Global Consumer Banking Survey already revealed that just 22 per cent of people actually trust their bank to give them unbiased advice. Hardly a sign of confidence, wouldn’t you say?

It’s become a sore point for many Australians that the Reserve Bank of Australia drops the cash rate, but banks wait two or three weeks, sometimes longer, to drop the rates for customers who have mortgages and loans – and then not always passing on the full cut.

It’s a well-known fact that, as a result of these rate cut delays, banks consistently pocket millions at the expense of their customers. Now, how is that earning anyone’s trust?

Add to that sneaky account charges resulting from convoluted fine print, often limited customer service and questionable financial advice from many bank advisors, and you have a few more examples of the type of poor practice for which many of Australia’s banks are becoming known.

And the fact that these banks are openly ‘in it for the money’, well, the idea of handing them the reins to our superannuation system seems ridiculous.

Many Australians move into retirement with limited super providing their income. So, every dollar counts. Splitting those dollars with major shareholders and bank CEOs is not a viable option for most Australians. They simply can’t afford it.

And when we take into account that industry super funds regularly outperform bank and retail funds, there seems little argument about where your life savings are better positioned.

It is a sentiment reflected by many Australian retirees. In the YourLifeChoices Retirement in Australia 2016 survey, members reported that they had their super managed in the following manner:

  • industry super fund: 36 per cent
  • retail super fund: 16 per cent
  • self-managed super fund: 10 per cent
  • other (such as defined benefits scheme): 15 per cent
  • no super: 23 per cent

With twice as many respondents having their money in industry super funds than retail funds, how the banks are even in the running to have more power over super is simply bewildering.

And yet it seems that, not only is the Government unwilling to hold the banks accountable for dodgy practices and bad behaviour, it may actually be considering handing them this added power.

Do you think the big banks should keep their snouts out of super? Do you trust your bank? Would you trust it with your super? Should the Government even be considering handing the banks increased power over the superannuation system?

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Written by Leon Della Bosca

Leon Della Bosca is a voracious reader who loves words. You'll often find him spending time in galleries, writing, designing, painting, drawing, or photographing and documenting street art. He has a publishing and graphic design background and loves movies and music, but then, who doesn’t?

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72 Comments

Total Comments: 72
  1. 0
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    The thing is people do not trust banks or at least their Financial Advisers to work for them. They are employed by the bank – paid by the bank and governed by the bank. In the good old days you used to be able to visit your Bank Manager and have discussion with him as a friend in many cases,today that is rare. Do local branches have managers or just some faceless person behind a computer in an office somewhere in the world.
    I guess that I am lucky having some financial acumen and knowledge and I only use the banks to park what money I have, but I make the decisions and do that which I wish to do.
    Financial Advisers, not likely, they still get their share no matter what and if they lose the lot – too bad so sad.

  2. 0
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    Fair dinkum, unbelievable.

    They don’t trust the banks – but do run with leftie, anti-bank propaganda.

    They do trust Industry super funds – allowing them to be controlled by rent seeking union bosses to their own benefit.

    What on earth happened to commonsense and “natural caution”.

    • 0
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      Industry funds are NOT controlled by “union bosses”. A little research coupled with an open mind could prove beneficial.
      If they are run to the benefit of union bosses how come they outperform all other super funds?

    • 0
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      Industry funds are NOT controlled by “union bosses”. A little research coupled with an open mind could prove beneficial.
      If they are run to the benefit of union bosses how come they outperform all other super funds?

    • 0
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      Problem is, Tom Tank, that union bosses accessing super fund member statements, personal details etc have been hauled in front of Corruption Commissions and later various courts.

    • 0
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      Problem is, Tom Tank, that union bosses accessing super fund member statements, personal details etc have been hauled in front of Corruption Commissions and later various courts.

    • 0
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      We are about to find out what the effects of handing control to the business council, mineral council and IPA and other lobby groups will do. These wonderful business associations will be making a lot of decisions on our behalf thanks to the stacking of them in everything.

      Even though the unions must have cost you something not a bludger I seriously doubt these business associates, councillors or commissioners have your back. Time will tell I suppose.

  3. 0
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    The bank I use charges me fees, will not notify me of cheaper or simpler ways to do things, and offers me biased advice (which I don’t use).

    I completely trust them to do this, so where is the problem? As long as they are making a profit, I don’t care because I am also a shareholder. The share of their profits I get pays all of my fees etc.

    Just play the system…

    • 0
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      really you shouldn’t have to play the system.
      My bank does not charge me fees, and i do save well and i’m sure they still get good earnings off their savers, Using their card sometimes instead of using cash is handy
      and sometimes i use Cash instead of card. NO worries, NO problems

  4. 0
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    I have no problem with any of the banks I use to do banking.

    As far as super and investing are concerned there is only one person that has my interests and that is me.

    Banks do have shareholders and they have to make them money or they desert the sinking ship.

    Financial advisors may know the theory but unless they have done it themselves they have little idea of how it really works. So what you need to is find one that walks the talk. If you can let me know as I haven’t found one yet myself. Looks at it this way if financial planners were successful themselves why would they be still a financial planner? Nothing legislation or anyone can do to change the that.

    If for example a financial planner felt that financial markets may be about to collapse would they get their clients out? I doubt it because they have then lost their business and livelihood.

  5. 0
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    Why trust any unregulated industry that charges you fees while profiteering from your money and not sharing those profits equally? It used to pay to save with banks when they were regulated.

  6. 0
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    What is meant by “trust” in the decision making process of a commercial contract? In what capacity does this “trust” form the basis of any agreements? Is it possible to love a bank? I think love is a strong word. Is it possible to trust a bank? That tends to bring into question people’s understanding of the meaning of the word itself rather than being a disparaging remark about a financial institution.

    • 0
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      Frank,
      Great question – what is trust?

      A gentleman that I used to work for many years ago spoke to me of trust and credit. And believe me Credit was a big thing in my game.

      He said to me – “That man wants you to extend to him credit to buy our product up to $10,000-00, would you trust him to lend him that much of your money with no real security ? If you would you are a fool and should look somewhere else for a job. If you don’t then that is trust.” In other words where money is concerned there is no trust.”

      A lesson in life well learned and well remembered. Giving your money to a bank is like trusting someone with your life savings.

      Why is it when you borrow money from a bank security to more than cover your borrowing is required however when you invest {loan} money to a bank they give you nothing in the way of security. Who trusts who?

    • 0
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      Interesting story dougie. I liked that.

  7. 0
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    Bankster’s……a necessary evil! How do you control, and contain a dangerous evil….by keeping our collective, wide ranging legislative hob nailed boots squarely across their throats…..with the downward pneumatic pressure of a 100 tonne vice….starting with the lovely old granny with a parcel of ASX listed Bank shares squirreled away in her top duchess drawer…..to the most lowly teller….and every last insidious villain deriving an income; in any form, from this most evil of industries….excluding depositing clients.

    Spoken like a true socialist you might think/say. No voted ‘tory’ all my life.

    Just fully awake to the fact that all life forms carry poisonous life cells within our structure…..just more so with those of us who are attracted to the Banking industry….in what ever guise, as a means of ’employment’.

    Always remember what old JC himself thought of the ‘Money Changers’ and their Temples of Enterprise…..!

    • 0
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      Without profits even the business of Australia is not profitable so no welfare. So if you are on welfare then your life depends on profits.

    • 0
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      grounded, JC obviously passed on that lack of trust, because it still exists today. Especially within the Muslim community, who refuse to pay interest. At least a couple of banks have agreed to change their method of operation to facilitate this. It is interesting how Muslims buy houses I think.

    • 0
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      @Old Geezer….As I stated, a necessary evil. I am not one wit opposed to Banks realising a healthy profit.

      I fully understand how the National, and Global Banking industries/cabals/cartels work.

      Within the terms of real life endeavour…banks per se, put very little, to nothing into the advancement of humankind….aside from renting Office space…(yes, most of those ‘ivory towers’ are owned by the speculative class), and employing a handful of people….by comparison to their ‘gigantic’ income/profit model of operating.

      I can never hope to alter or change any persons mind. People…if interested need to go and research the subject for themselves. Needless to say, with evil greed being the fuel that banks are driven by, Bankster’s will be around for a long time to come…

      I hold my steadfast opinion…which I expressed. Sorry Old Geezer….I don’t draw a Welfare payment….too much bloody money I have….which I hate sharing some of with lowlife bankers/gangster’s….in the name of “fees”.

    • 0
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      I hope you haven’t got your money invested anyway because if you have then the banks will be profiting from it.

      I pay no banking fees myself but I love my bank dividends.

    • 0
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      Couldn’t agree more with you Frank. I was in Melbourne late last year…and just in the course of a days roaming, I came across a Islam approved ‘banking institution’.

      Wondered…and still wonder, how they exist…or can doll the loot out, without interest payments. Obviously they have one of those rare old ‘money trees’ out the back somewhere….or a direct debit arrangement with Centrelink….Centrepay, to recoup a more inflated initial principal sum….from the voluminous number Islam devotees who receive welfare as their only source of income.

      Old Mohammed might be onto something…!?

    • 0
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      @ Old Geezer….Yes, I do have a bit of it invested…as most do these days. No, I am not opposed to Banks turning a reasonable shilling – profit, on my invested dollars…..just heartily sick of obscene size of their margins….profits, advertised each six months.

      You are obviously a smarter man than myself OG….I would normally defy any person to tell me how they make a quid – dividend out of the banks…without paying a fee.

      (I do know of very protracted, convoluted ways…though they also can lead to further hassles)

      The very best of luck you to old mate….(now tell me how you do it….I want in)

    • 0
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      Muslims use what is called a lease to own arrangement where they pay rent to t third party who pays their interest. Just another step in the lending process.

    • 0
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      Thanks OG…Since Frank mentioned it, I’ve just started looking on line how the Muslims structure this ‘interest free’ method of financing…Cheers

    • 0
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      Rent to own is also used by people who can’t get a loan themselves. I know people who make a living out of doing this so maybe the banks are onto a goldmine with Muslims and their beliefs.

    • 0
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      I think the Islamic council has it’s cash flow increased from the halal tax as well.

  8. 0
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    I have always trusted the banks to be fundamentally honest – BUT then they got so heavily involved with flogging shonky insurance. Sold whatever souls they had, and they have finally lost my trust. they are in too powerful and TRUSTED a position in this country to play the cheap and nasty insurance scam game, but that’s business for you. “Nothing personal, it’s just business” fundamentally demonstrates capitalism can’t actually be trusted. Just took me a long time to really work that out. Bring on the regulation!

  9. 0
    0

    Let me see: Industry Super Australia commissions a report that says 1/3 of people trust banks and 2/3 of people trust Industry super funds to handle their super! Well I never!!
    Wonder what that little bit of ‘study of the bleed’n’ obvious’ cost. Something about the piper calling the tune comes to mind…….

    Meanwhile other recent research says that people may whinge about the banks but few actually take any action such as asking for a better deal, reviewing their accounts, or even changing to another institute altogether.

    There are several ‘national sports’ in Australia and one of them is Bank Bashing!

    • 0
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      Yes I shake my head in that if people don’t trust banks then why do they use them? Maybe it is just because people like to whinge about everything these days.

  10. 0
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    Answers to your questions..

    Do you think the big banks should keep their snouts out of super? Its up to them as long as they do a good job, very important to track and monitor your super after all it is your’s DO NOT LEAVE AND FORGET..
    Do you trust your bank? Yes my bank does a good job and has offered me better interest rates and NO fee accounts.
    Would you trust it with your super? I would trust NO one with my super, I do it all myself..
    Should the Government even be considering handing the banks increased power over the superannuation system? NEVER the Banks are at least accountable to you if you have your super with them, the Government is accountable to know one and they are far more a worry than the banks. Its the Government that wants your super money to pay their debt and enormous salaries.
    Financial advisors are also bad news had 3 in my life time sacked them all for total incompetance and shonky advise and now do it myself and doing much better (I do have a SMSF).

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