Overall super satisfaction dives as one sector soars

Satisfaction with industry super funds jumps as overall satisfaction within the sector falls.

super satisfaction

Satisfaction with industry super funds jumped in the past 12 months but overall satisfaction fell, according to the latest findings from Roy Morgan, as lobbying for low-cost advice intensifies and the super watchdog finally gets new powers.

The Roy Morgan Superannuation Satisfaction Report comes as key super bodies agitate for industry funds to be allowed to provide low-cost financial advice to members in the restructured post-royal commission world.

Industry Funds Services (IFS) chief executive Cath Bowtell pointed to a likely softening of “the rules that hamstring low-cost simple advice”. And Australian Institute of Superannuation Trustees (AIST) chief executive Eva Scheerlinck said that while the royal commission had exposed conflicted financial advisors, demand for quality financial advice was increasing.

“We know that the number of people who need advice is growing and there is a demand from members for advice on a host of financial matters,” she told moneymanagement.com, saying this included advice on account consolidation, spouses and Centrelink entitlements.

“The time is ripe for the legal framework around advice – and how advice is described – to change,” she said.

Ms Bowtell agreed, saying the rules that hamstring the provision of low-cost simple advice could be relaxed and that the “governance model of profit-to-member funds meant they were in a strong position to provide quality, low-cost advice to members.”

In other super news, watchdog the Australian Prudential Regulation Authority (APRA) officially has the power to seek civil penalties against fund directors who don’t act in the best interests of members.

APRA deputy chairman Helen Rowell said the passing of legislation allowed the regulator to deal with underperforming funds earlier than had been possible.

“Previously, APRA could only direct a superannuation trustee after a contravention of the law had taken place, or where APRA believed there was an urgent, material threat to members’ interests,” she told the Financial Review.

“The new directions power gives APRA the ability to intervene at an early stage before members suffer significant harm.”

This might involve requiring underperforming funds to merge or exit the industry, she said.

The Roy Morgan report shows that industry funds improved their satisfaction rating by 0.9 percentage points (to 62.1 per cent), at a time when the total market satisfaction dropped 0.4 points to 60.3 per cent.

“As a result, industry funds have increased their lead over retail funds from two percentage points a year ago to the current lead of 6.4 percentage points,” it said.

The report, based on annual face-to-face interviews with more than 50,000 consumers, said that retail funds had shown declines in satisfaction at all levels, with the biggest decline being a drop of 14.3 percentage points for members with balances under $5000 and an eight percentage point decline for those with balances of $700,000 and over.

Overall, SMSFs lead with 73.4 per cent of their members satisfied.

Of the 15 best-performing industry and retail funds, Unisuper with a satisfaction rating of 71.2 per cent was well ahead of second placed HESTA with 68.3 per cent and Cbus (66.6 per cent).

The best performer among retail funds was Macquarie in eighth place overall with a satisfaction rating of 63.2 per cent, followed by Plum (62.2 per cent) and Colonial First State (57.3 per cent).

According to the latest APRA data, industry funds have balances of $629.6 billion or 23.7 per cent of the total market and have now passed the $589 billion in retail funds.

Do you have an industry, retail or self-managed fund? Are you happy with developments post the royal commission?

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    COMMENTS

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    Geminiwoman
    9th Apr 2019
    9:53am
    I have always said, and still say, that Superannuation is a great idea and forces people to save for their futures so that they are less of a burden on the taxpayers, but, as the Government made Superannuation compulsory, the whole Superannuation industry should be well Government regulated AND Government guaranteed. It simply isn't right that everyone should be forced to have Superannuation by one body, only to have that money eaten away by another.
    Jim
    9th Apr 2019
    6:39pm
    Absolutely correct, it was the best thing that Hawke and Keating did when they were in charge, I remember when it first came in, we agreed to forego a 2.5% pay rise at the time in favour off the Money going into superannuation, I don’t think that this is when the superannuation guarantee came into force, from memory it was in the mid 80s I think.
    Cowboy Jim
    9th Apr 2019
    10:05pm
    Right you are Jim - about 1988 I started with the super in a pub, boss hated it. Employees did not pay anything at the time but bosses had to.
    Greg
    10th Apr 2019
    12:51am
    Yep, I'm a super fan, people when they're young in particular are just not interested in their retirement, it's like "forever away". This is a great forced savings plan which, in my case, enabled me to retire at 56.
    Old Geezer
    9th Apr 2019
    10:58am
    That satisfaction in industry funds may be short lived as some have already doubled their fees and some can't handle the inflows resulting in bad investment decisions being made.
    Sundays
    9th Apr 2019
    12:29pm
    Fact Check please OG. Industry funds have the lowest fees and best returns. Look at any of the performance tables
    Tom Tank
    9th Apr 2019
    12:29pm
    Where did you get that information from OG? Sounds suss to me as I have daughter who works in one of the leading industry funds and they are doing very nicely thank you with a very satisfied customer base.
    Could you perhaps being trying to make a political point?
    Tom Tank
    9th Apr 2019
    12:29pm
    Where did you get that information from OG? Sounds suss to me as I have daughter who works in one of the leading industry funds and they are doing very nicely thank you with a very satisfied customer base.
    Could you perhaps being trying to make a political point?
    P$cript
    9th Apr 2019
    3:44pm
    OG generating alternative facts. Again!!!!!!
    Greg
    10th Apr 2019
    1:03am
    Just more BS from him - everyday he does the same, must be some type of psychiatric problem he has.
    johnp
    16th Apr 2019
    10:43am
    OG is a serial liar !!
    Kram
    9th Apr 2019
    11:07am
    Simple, choose an Industry Fund, invest in the Indexed Option which has the lowest fees. As an investor you can only control 2 things, 1. Where your money is invested. 2. The fees you pay. The more they take, the less you make. In this case you get what you DON’T pay for
    KSS
    9th Apr 2019
    12:31pm
    If the main issue with banks providing financial advice was that they will only recommend their own products, how will allowing industry funds to provide financial advice be any different> They will still only recommend their own products; Hostec are highly unlikely to say to a customer, "actually go down the road to to Host+ they have something to suit you better" now are they? How is that any different from NAB not recommending products from say ANZ?
    Tom Tank
    10th Apr 2019
    9:42am
    When I retired some years ago my industry fund recommended a financial advice centre set up by a group of industry funds. I paid for that advice, no commissions involved, and I and my wife set up, on the advice given, an income stream run by a different industry fund to the one I was with at the time.
    That has worked well for us, we are not trying to build wealth and our joint super amounts were modest, and it provides with what we need.
    KSS you are correct about the financial advice given by the banks but that advice was driven by the commissions being paid and the LNP government firmly resisted any attempt to legislate that financial advisers must act in the best interests of their customers.
    Tom Tank
    10th Apr 2019
    9:42am
    When I retired some years ago my industry fund recommended a financial advice centre set up by a group of industry funds. I paid for that advice, no commissions involved, and I and my wife set up, on the advice given, an income stream run by a different industry fund to the one I was with at the time.
    That has worked well for us, we are not trying to build wealth and our joint super amounts were modest, and it provides with what we need.
    KSS you are correct about the financial advice given by the banks but that advice was driven by the commissions being paid and the LNP government firmly resisted any attempt to legislate that financial advisers must act in the best interests of their customers.
    GeorgeM
    9th Apr 2019
    12:36pm
    Interesting comment, Kram. See my comment below if you need Financial Advice from one of the Industry Fund advisers.

    The article notes the views of the Industry Fund Services (IFS) CEO. They are the providers of Financial Advisers for a large number of Industry Sup Funds, including the very large Australian Super. I find her comment “the rules that hamstring low-cost simple advice” misleading - as THEY are one ones who charge high fees for doing very little and sub-standard work often done by incompetent admin staff who support their FAs. Blaming it on APRA is nonsense as they just do the standard statement required by APRA in maybe 10 minutes (a standard form updated via a simple software - maybe a spreadsheet).
    floss
    9th Apr 2019
    1:41pm
    I am more than happy with a Industry Super Fund if only the LNP. would keep their hands off it.
    greenie
    9th Apr 2019
    6:22pm
    What do you mean by that comment?
    Please explain.
    Tom Tank
    10th Apr 2019
    9:47am
    The LNP government were attempting to open up the Board of Trustees to have seats that would include board members from retail funds.
    The Banking Royal Commission included an examination of Super Funds as attempt to undermine Industry Funds. This backfired as they came out smelling of roses whereas the retail funds were exposed.
    Tom Tank
    10th Apr 2019
    9:47am
    The LNP government were attempting to open up the Board of Trustees to have seats that would include board members from retail funds.
    The Banking Royal Commission included an examination of Super Funds as attempt to undermine Industry Funds. This backfired as they came out smelling of roses whereas the retail funds were exposed.
    TREBOR
    9th Apr 2019
    8:41pm
    I bring you the Trebor Scheme - a one stop shop for all super - yes ALL super incouding fat cats.. all run by the same rules, totally removed from political and industry hands, and sanding alone as a body controlled by a limited duration elected body employing best professionals, with all costs to contributors coming from earnings.

    At the moment there are over three TRILLION dollars residing in super funds - bring those under one roof, start paying out immediately to thos currently invested, while investing the rest in solid gold loans to government to produce genuine infrastructure and future for the nation and people - and away we go.. incorporate the current Future Fund at around $130Bn, sack its controllers.. absorb the current Social Security levies etc as well as the never-ended 7.5% of income tax for Pension, and take over Social Security by a graduated approach.....

    As said - loans back to government and genuine local investment for genuine action and infrastructure, at guaranteed interest rates.. and away you go... rolling in it!
    Cowboy Jim
    9th Apr 2019
    10:28pm
    The Trebor Scheme is very similar what we used to have in Switzerland. It is still current over there but I have serious doubts Aussies would like something like it.
    It works this way: From age 18 you start contributing to a retirement scheme, your employer does as well but with a higher percentage of your wages. You go thru life and pay in your levy. Millionaires and high income earners pay the same percentage, at age 64 for women you will get the pension, males will still have to wait till 65 years of age. Govt would like to change that but people will always vote it down.
    Now the important bit is: Should you die before your age pension kicks in, the money is available for the people who are still alive, no residue for children and so on. My mum got her pension till she died at 96, her father never made it past 60. That is the reason old age pensions can be given to older people since many just do not make it to old age. On top of that all pensions are fully taxable so the big boys who put in $100'000 a year will still only get the top of about $3000 a month after 65 years of age.
    Dermot
    10th Apr 2019
    12:46am
    Industry super funds only - the rest are $&$87@?!78
    Dermot
    10th Apr 2019
    12:47am
    Many wankers posting tonight.
    johnp
    10th Apr 2019
    1:25pm
    OG must have nothing to do and all day to do it in, continually telling lies !!


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