As the industry funds and banks slug it out in the Productivity Commission (PC) new research from Roy Morgan has shown higher levels of satisfaction amongst members of retail funds and self-managed funds than those who are members of industry funds.
And the reason appears to be higher account balances and relatively stable markets.
The Roy Morgan research, conducted during July, showed that satisfaction with the financial performance of retail superannuation funds (58.7 per cent) was higher than industry funds (58.2 per cent) for the sixth consecutive month, after having trailed them for more than a decade.
It found that satisfaction with self-managed superannuation funds (SMSFs) maintained their overall lead with 73.8 per cent, up 2.8 per cent points in the last year.
The Roy Morgan’s July Superannuation Satisfaction Report covering over 30,000 superannuation fund members clearly showed that high balance super accounts showed biggest satisfaction gains with SMSFs and retail super funds
In the six months to July 2017, the satisfaction with SMSFs where account balances were $700,000 or more was 85.2 per cent, up 7.7 points in the last 12 months and well ahead of retail funds in the segment with 77.6 per cent (up 4.1 points) and industry funds on 76.9 per cent (up 0.3 points).
The Roy Morgan analysis noted, however, that while SMSFs were the clear satisfaction leaders in the $700,000 plus segment, they were not so dominant in the $250,000 to $699,999 segment where competition was very close among the three major fund types.
It said that in that segment of the market, industry funds led with 72.6 per cent satisfaction, followed by SMSFs (71.8 per cent) and retail funds (68.9 per cent).
The research analysis said the overall lead in satisfaction among SMSFs was a result of the fact that they really only operated with larger balance accounts, where satisfaction for all super types was higher and that, by contrast, industry and retail funds also operated with lower balance accounts such as the under $5,000, where satisfaction was less than 50 per cent.
Commenting on the results, Roy Morgan industry communications director, Norman Morris said the research had highlighted the need to measure members’ satisfaction by account balance, because for example the $700,000 and over group although only accounting for only 3.9 per cent of fund members held 23.8 per cent of all superannuation funds.
“Although industry funds have held a lead in satisfaction over retail funds for a decade or more, it now appears that retail funds have closed the gap and in fact taken a narrow lead mainly as a result of gains where fund balances are $250,000 or more but also showed some improvement in the $5,000 to $100,000 range. Industry funds have lost some ground in satisfaction over the last year in all segments under $700,000 but made some minor gains over that amount,” he said.
