The big banks and retail superannuation funds are using a deliberate strategy of overloading consumers with choices, according to Industry Super Australia (ISA).
Citing the results of new research commissioned by ISA, the industry funds organisation pointed to a significant number of consumers who believed the range of superannuation products made it hard to make choices and a similar number who believed banks had a track record of offering a variety of financial products designed to make it hard to get a clear idea of what was right for them.
Commenting on the survey results, ISA chief executive, David Whiteley claimed it seemed the banks and retail funds had a deliberate business strategy to overload consumers with choices.
“Just as we’re seeing in private health insurance, the proliferation of super product options is muddying the waters,” he said. “The big banks’ business model is designed to sell products to consumers to make a profit. It would seem this has led to an explosion of product options in super, many of which perform poorly and leave members worse off.”
According to ISA analysis of APRA data to 30 June 2016, the big four banks, Macquarie and AMP collectively offer around 22,000 superannuation investment options while industry super funds collectively offer around 660 investment options.
