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Satisfaction with performance of Industry Super Funds remains ahead of Retail Funds for the last 10 years

Source: Roy Morgan Single Source (Australia), 6 months moving average. Average sample size = 15,500. Base: Australians 14+ with Superannuation.

Satisfaction with the financial performance of retail superannuation funds in the six months to August 2013 was only 45.5%, compared to 50.8% for Industry Funds and 71.6% for Self Managed Funds. Retail Funds have lagged behind the satisfaction with Industry Funds for the last 10 years. These are the latest findings from the August 2013 Roy Morgan Research ‘Superannuation Satisfaction’ report based on over 30,000 interviews with people per annum with Superannuation.

The following chart shows that over the entire 10 years of the survey, self managed super funds have generally been around 20% points ahead of the other major players in terms of satisfaction. Industry funds were marginally ahead of retail funds up to 2007, but since that date have mostly increased their lead.

Satisfaction with Financial Performance of Superannuation

Satisfaction with Superannuation Funds
Source: Roy Morgan Single Source (Australia), 6 months moving average. Average sample size = 15,500. Base: Australians 14+ with Superannuation.

Of the major industry funds, HESTA has the highest satisfaction with 54.5%, followed by Cbus (52.2%), First State Super (51.8%) and AustralianSuper (49.3%)

The highest placed major retail fund was the Westpac Group with 48.5% followed by the CBA Group on 47.7%. The AMP Group was the poorest performer among the major retail funds with only 39.1% satisfaction.

Satisfaction with Financial Performance of Major Industry and Retail Superannuation Funds

Industry Super Funds lead
Source: Roy Morgan Single Source (Australia), 6 months to August 2013, sample size = 15,809. Base: Australians 14+ with Superannuation.

Norman Morris, Industry Communications Director, Roy Morgan Research, says:

“Although there are various industry tables of performance and fees published, it is doubtful that the majority of people holding super would be aware of or understand these. For this reason we have been measuring what people think about the financial performance of their fund because it will be this which will ultimately determine their action.

“Our research shows that the major reason that people are switching to SMSFs are associated with the poor investment performance and the level of fees and charges and as a result their funds are moving from Retail and a to a lesser extent Industry Funds into SMSFs.

“The ease of switching super funds and the increase in people using SMSFs means that the retail sector will increasingly rely on their adviser network to retain customers. The relatively poor long term performance of the retail funds however is of concern as there is a very clear fiduciary responsibility for financial planners to act in the best interest of their clients and yet financial planners are more likely to direct their clients to retail funds.”

Details of the results across Superannuation Sectors can be found in the latest Superannuation Satisfaction Report via the Roy Morgan Research Online Store. Roy Morgan Research also collects information on the intention to switch super funds and the reasons given and the destination of fund flows, providing a picture on the market from the customer point of view. This information can be found in the Roy Morgan Research Superannuation and Wealth Management Report.

About Roy Morgan Consumer Single Source

Roy Morgan Single Source is based on over 50,000 interviews each year (over 30,000 with superannuation) and has been designed and engineered to represent the ideal source model. It provides an integrated understanding of consumers; what they are like, what they consume, what they buy, what they think, what they want, what they watch, read and listen to. The overriding benefit of Roy Morgan Single Source is the strategic insights it offers in the ability to link many aspects. Not only can an organisation’s profitable customers be delineated by what they think, do, watch, but so can non customers. Hence brand positioning, product differentiation, merchandising, efficient media planning, market expansion and line extension opportunities can all be considered in the light of the correct understanding of the marketplace.

For comments or more information please contact:

Norman Morris, Industry Communications Director
Telephone: +61 (3) 9224 5172
Mobile: +61 402 014 474
Email: norman.morris@roymorgan.com

About Roy Morgan Research

Roy Morgan Research is the largest independent Australian research company, with offices in each state of Australia, as well as in New Zealand, the United States and the United Kingdom. A full service research organisation specialising in omnibus and syndicated data, Roy Morgan Research has over 70 years’ experience in collecting objective, independent information on consumers.

In Australia, Roy Morgan Research is considered to be the authoritative source of information on financial behaviour, readership, voting intentions and consumer confidence. Roy Morgan Research is a specialist in recontact customised surveys which provide invaluable and effective qualitative and quantitative information regarding customers and target markets.

Margin of Error

The margin of error to be allowed for in any estimate depends mainly on the number of interviews on which it is based. Margin of error gives indications of the likely range within which estimates would be 95% likely to fall, expressed as the number of percentage points above or below the actual estimate. Allowance for design effects (such as stratification and weighting) should be made as appropriate.

Sample Size

Percentage Estimate

 

40%-60%

25% or 75%

10% or 90%

5% or 95%

5,000

±1.4

±1.2

±0.8

±0.6

20,000

±0.7

±0.6

±0.4

±0.3

50,000

±0.4

±0.4

±0.3

±0.2

Image credit: Flickr, Christiana Care