Australians with industry superannuation funds have posted higher satisfaction levels than those with retail funds, with financial performance of industry funds on a rating of 59.7 per cent and ahead of retail funds with 57 per cent in the six months to August, according to Roy Morgan’s survey.
The company’s Single Source survey, which examined more than 50,000 consumers, found that although the lead in satisfaction by industry funds had varied considerably since 2010, over the last 12 months industry funds increased their lead over retail funds to 2.7 per cent as of August, 2016, from 0.7 per cent a year earlier.
According to Roy Morgan, this could be explained by the fact that retail funds were more sensitive to movements in the ASX and they tended to reduce the gap in satisfaction to industry funds between 2012 and 2015, which coincided with a 48.3 per cent increase in the ASX, and lagged behind the industry funds over the last year due to a drop of around 10 per cent in the ASX.
Also, industry funds led in overall customer satisfaction and in particular for all balances of $5,000. In the important high value market with balances over $700,000, a segment where competition was greatest from self-managed super funds, led with 83.3 per cent satisfaction against the retail funds which posted 80.5 per cent.
According to Roy Morgan’s industry communications director, Norman Morris, the satisfaction levels should be also closely monitored in the $250,000 plus group as it held over half (54.5 per cent) of all superannuation funds and where currently industry funds were still leading in satisfaction with a 78.7 per cent score.
“It is important to understand what fund customers think regarding the financial performance of the two groups. It should ultimately be the customers who decide where their funds are best directed but there may be difficulties for many understanding or accessing performance tables, and advisers may also influence a less-than-optimum choice,” Morris said.
“Of particular significance is that satisfaction among industry-fund customers has remained ahead of retail-fund customers for many years, and also poses a real threat in the higher balance segments.
“It is important to note that both groups face potential losses to self-managed funds from their higher value customers if satisfaction levels decline.”
