Member satisfaction ratings among superannuation funds have fallen across all categories from the record highs of early 2022, according to research.
In July 2023, overall super fund satisfaction stood at some 65 per cent, marking a decrease of 7 per cent from the record high reached in January 2022 (72.0 per cent).
New data from Roy Morgan’s Superannuation Satisfaction Report, which tracked satisfaction ratings between February 2023 and July 2023, found retail funds to be the lowest-rated category (down 7.3 per cent to 59.6 per cent). However, this remains significantly higher than the long-term average customer satisfaction for retail funds (54.9 per cent).
Industry funds fell 7.4 per cent to 66.8 per cent.
Public sector funds were down 7.9 per cent, the largest decline for any of the super fund categories, to 71 per cent, marking the lowest satisfaction rating for such funds since September 2020.
However, Roy Morgan highlighted that public sector funds recorded the second-highest satisfaction ratings behind self-managed super funds (down 5.6 per cent to 74.4 per cent).
Additionally, super satisfaction is still significantly higher than the long-term average of 58.1 per cent from 2007–23 despite the decrease over the last year and a half, the firm said.
It is also higher than at any time prior to the pandemic years of 2021–22.
Chief executive, Michele Levine, said rapid consolidation activity within the super sector in the last few years has also been a factor.
“In recent years, many superannuation funds have merged or announced their intention to merge. These mergers include AustralianSuper taking over LUCRF, HESTA merging with Mercy Super, UniSuper taking over Australian Catholic Super, Active Super merging with Vision Super, Hostplus merging with Statewide, Sunsuper, QSuper and Australia Post Superannuation Scheme (APSS) merging to form Australian Retirement Trust and many other mergers,” Levine said.
“Roy Morgan has extensive data on the impacts these mergers have on the customer satisfaction of the super funds involved in the mergers and acquisitions. One of the key messages coming through from these mergers is the importance of communication and a smooth transition process for members throughout.
“The superannuation industry will continue to consolidate in the years ahead as larger players in the market look to increase their clout and the amount of assets they have under management in an increasingly competitive industry.
“For these larger and more complex superannuation funds to maintain a high degree of customer satisfaction and better investment returns will be more important than ever before.”
2023 was also a year of volatile markets and uncertain economic conditions, with the drop in customer satisfaction from early last year occurring as the ASX 200 experienced a period of volatility since mid-2021.
Levine explained: “The ASX 200 reached a high of 7,628.9 on August 13, 2021, and fell by almost 1,200 points when the index closed at 6,433.4 on June 20, 2022. Since the middle of last year, the ASX 200 has significantly recovered and closed at 7,410.4 at the end of July.”
The period covered by the research also saw four interest rate hikes by the Reserve Bank of Australia (RBA) to a cash rate of 4.1 per cent, the highest in over a decade.
The increases were caused by higher-than-expected inflation readings that were at a 32-year high of 7.8 per cent in the year to December 2022 – the highest since March 1990.
Levine added: “Looking forward there are several challenges facing the Australian economy including the risk of a slowdown in China impacting on Australia’s largest commodity exports – iron ore, coal and gas as well as concerns about the value of commercial real estate as increasing numbers of Australians continue to work from home.”
