Industry super fund members with balances over $5000 had higher levels of satisfaction with their fund’s performance compared to those with retail and self-managed funds (SMSFs), according to the latest Roy Morgan findings.
Even among members with balances of $700,000 or more industry super funds are well ahead with a satisfaction level of 87.5 per cent, compared to only 77.9 per cent for retail funds and 82.7 per cent for SMSFs.
Roy Morgan’s ‘Satisfaction with Financial Performance of Superannuation in Australia Report June 2018’ is based on in-depth interviews conducted face-to-face with owners of superannuation funds.
Over the last 12 months, industry funds showed gains in satisfaction across all balance segments, with the best performance being a gain of 9.5 per cent in the over $700k group, followed by 5.0 per cent gains in the $250k to $699k segment and a 4.4 per cent increase in the $100k to $249k segment.
Self-managed funds had losses in satisfaction in all of these important groups, with the greatest decline being 18.3 per cent in the $100k to $249k bracket.
The biggest increase for retail funds was 10.9 per cent in the under $5000 segment and 1.6 per cent in the $700k and over segment, with the other segments showing losses.
Although retail funds have the highest satisfaction among the low balance members, the significance of this needs to be measured against the funds held in this segment. The accounts holding under $5000 represent only 0.1 per cent of the total market value of all superannuation funds.
By contrast, at the other end of the market, in the $250k plus balance segment, there are only 20.6 per cent of fund members but they hold nearly two thirds (64.4 per cent) of the total market value.
Norman Morris from Roy Morgan Research says the satisfaction findings largely reflect the market performance of the various superannuation funds.
“The superannuation sector is currently receiving a great deal of adverse publicity in the finance Royal Commission, particularly in relation to fees, advice, minimum balances for self-managed super, industry funds etc,” Mr Morris said.
“The extensive publicity given recently to the end of financial year performance for individual superannuation funds, has generally shown that industry funds have been the best performers. This is in line with the satisfaction data.
“Superannuation satisfaction is a vital part of understanding the behaviour of members as it is unlikely that the vast 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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