Superannuation funds which lose high balance members to self-managed superannuation funds (SMSFs) are probably finding it a one-way street, with little likelihood those members will return, according to new research released by Investment Trends.
According to the research, around one million Australians changed superannuation funds in the past year, 6 per cent of whom moved to an SMSF. However, of these, less than 1 per cent migrated back to funds regulated by the Australian Prudential Regulation Authority (APRA).
Commenting on the research, Investment Trends senior analyst Uwe Helmes said it represented a "one-way valve".
"Once members start an SMSF, they rarely ever go back," he said.
However, Helmes noted that the research also showed that the majority of members who were considering setting up an SMSF in the future had said there was something their super fund could do to prevent them from leaving.
The Investment Trends research also highlighted the importance of default funds, noting that 69 per cent of super fund members were still in a fund they kept from a previous job or the default fund their employer put them into.
"Half of those who set up a super account over the last two years chose their employer's default fund," Helmes said. "The default fund still gets the lion's share of the new entrants to the labour market and those who change jobs, so it's critical for both industry and retail funds to own that space going forward.''
