Super funds will need to ramp up their offering to prevent member outflow to self-managed super funds (SMSFs), according to a report by CoreData.
CoreData’s Member Retention Report, which was based on a survey of more than 1500 super fund members, found the majority of those most likely to leave their fund to set up an SMSF – 83 per cent – would first consider using the main fund’s SMSF services, if available.
This is particularly true for industry fund members, according to CoreData head of advice, wealth and super, Salvador Saiz.
“If we look closer, then we see that one in three of those members most at risk of setting up/joining an SMSF, cite such services by their main fund as a key tool for retaining their business,” Saiz added.
“As funds search for growth and look to broaden their services offer, it is no surprise that outside of direct investment options, funds are considering or have already begun to offer other services – such as mortgage broking services and even partnering with SMSF specialist providers – in order to service those members most at risk of setting up an SMSF or those members that already have an SMSF.”
Financial advice remains one of the key areas super funds need to maintain and improve in order to retain members, the report also found.
The member retention report found that while maintaining competitive fees and investment returns was essential, almost half of those at risk of switching funds (44.5 per cent) suggested advice was certainly a key factor.
A large proportion of members, however, are not aware that their fund offers advice, Saiz said.
“There is no doubt that advice is a key factor in member engagement, with previous research indicating not only that members would like to access advice (in one form or another) through their superfund, but that it is a key retention tool.”
Far from advice only being relevant to older generations, slightly more than half of respondents believe that superfunds should get in touch with members as early as possible to discuss their individual financial future, the report found.
