POWERED BY MOMENTUM MEDIA
Merging super funds need to alleviate fee and performance concerns
Superannuation funds that are in the process of merging or are thinking about merging will do well to alleviate concerns surrounding fees and underperformance, according to Investment Trends.
The research house’s latest super engagement report found while 27% of super members considered a merger with a larger fund as positive, 11% viewed it as negative.
The sentiment was similar if their super fund merged with a smaller fund at 21% positive and 11% negative.
Investment Trends senior analyst, Bailey Hao, said the 11% who held a negative sentiment towards mergers were most concerned about fees and returns and were worried about changes to customer service levels and how they interacted with their super fund.
“Super funds that are in the process of merging, or thinking about doing so, will do well if they alleviate their members’ top concerns of potential increased fees and underperformance. But our research also highlights that branding plays a key role,” Hao said.
The report also found that most members (78%) were indifferent if their super fund were to change its name or logo after the merger, and 18% opposed potential changes.
“Those who oppose a brand change most often believe the existing brand already represents their member base well and see a refresh as a waste of resources. To limit member attrition, super funds must ensure some semblance of their current identity and values is retained before rebranding to appeal to a wider member base,” Hao said.
“…There is a general view that engagement between Australians and their super fund is underwhelming, but our research shows that super fund members are very much engaged with current events, having strong opinions about their super fund’s strategic decisions.”
The report was based on a survey of 9,179 super fund members conducted during March to May 2021.
Recommended for you
The two funds have announced the signing of a non-binding MOU to explore a potential merger.
The board must shift its focus from managing inflation to stimulating the economy with the trimmed mean inflation figure edging closer to the 2.5 per cent target, economists have said.
ASIC chair Joe Longo says superannuation trustees must do more to protect members from misconduct and high-risk schemes.
Super fund mergers are rising, but poor planning during successor fund transfers has left members and employers exposed to serious risks.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom 465 Calder Road Calder
96.54 3 y p.a(%)
2
DomaCom DFS Mortgage
85.26 3 y p.a(%)
3
Global X 21Shares Bitcoin ETF
78.55 3 y p.a(%)
4
BetaShares Crypto Innovators ETF
50.39 3 y p.a(%)
5
Global X GlobalX FANG+ ETF
47.50 3 y p.a(%)
