Tuesday, October 14th, 2014 - Roy Morgan Research

The satisfaction of members of industry superannuation funds with balances of more than $5,000 is well ahead of retail superannuation customers with similar balances. For amounts under $ 5,000, retail funds satisfaction levels are ahead of industry funds but this segment holds only 0.2% of the total money in superannuation funds.

These are the latest findings from the Roy Morgan Single Source survey of 16,754 interviews with people holding superannuation conducted in the six months to August 2014.

Superannuation Satisfaction, Industry Funds V Retail Funds

Satisfaction with superannuation increases with amount held, with both industry funds and retail funds having their highest satisfaction levels among people with balances of $700,000 or more.

The following chart shows that for all balance levels over $5,000, satisfaction with industry funds exceeds retail funds by a clear margin.

Satisfaction with Financial Performance of Superannuation - Industry Funds vs Retail Funds

superannuation satisfaction by amount held

Source: Roy Morgan Single Source (Australia), 6 months to August 2014 (n=16,754)

The biggest lead in satisfaction that industry funds have over retail funds is at the top end where among the $250,000 to $700,000 group the gap is 8.5% points (73.6% compared to 65.1%). In the $700,000 and over segment the lead by industry funds is 8.4% points (84.4% compared to 76.0%). It is worth noting that these high levels of satisfaction can be compared very favourably with self-managed funds where the satisfaction level for the same period is 79.2%.

Who holds the superannuation funds?

The superannuation funds held by members show a major skew to the top end. This is an important point to understand when looking at satisfaction levels because the high value members ideally should have the highest satisfaction levels in order to reduce the chances of them switching.

Although more than six out of ten (64%) people with superannuation have balances of less than $100,000, they account for only around one fifth of the dollars (19.8%)held in superannuation.

Distribution of Superannuation Funds: Share of Funds V Share of Members

share of superannuation dollars

Source: Roy Morgan Single Source (Australia), 6 months to August 2014 (n=16,754)

At the top end of the scale, where self-managed funds are making major inroads, these people with $700,000 or more in superannuation account for only 2.5% of people with superannuation but have 16.6% of total balances.

The people who have $250,000 or more in superannuation account for just over half of all funds (51.3%) but represent only 14.4% of total customers. This shows the significance of making sure that these people at the top should be targeted to achieve the highest levels of satisfaction if funds are to be retained and attracted.

The best performing industry funds

Roy Morgan Research measures the satisfaction levels of a large number of retail and industry superannuation funds. The following chart focuses on the performance of some of the major industry funds.

The best performer of these funds is Cbus with 63.3% satisfaction, followed by Unisuper with 61.3%.

Satisfaction with Financial Performance of Major Industry Funds

top industry superannuation finds

Source: Roy Morgan Single Source (Australia), 6 months to August 2014 (n=16,754)

Three of the major funds scored below the industry average of 56.6%, they were SunSuper (53.0%), REST Super (49.2%) and HOSTPLUS (47.2%). The Australian Super satisfaction was just above average with 57.4%.

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

"The outcome of the intense competition in the superannuation market between industry funds and retail funds will ultimately be decided by consumers. Our research shows that at this stage, industry funds are viewed much more favourably in terms of performance by their members than are clients of the retail funds. Of particular significance is the fact that industry funds have their biggest lead in satisfaction at the top end of the market where members hold more than $250,000 and who account for just over half of funds in superannuation.

 

"It is this top segment that is the primary group facing significant losses to self-managed superannuation funds, making it imperative that both industry and retail funds maintain a strong connection with them if they are to avoid losses.

 

"We have seen in our research that poor investment performance and associated issues relating to fees and charges are important motivators in switching superannuation providers."

View this release in full on our website.

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Roy Morgan Research


Roy Morgan Research is Australia's best known and longest established market research and public opinion survey company. Roy Morgan Single Source is thorough, accurate, and provides comprehensive, directly applicable information about current and future customers. It is unique in that it directs all the questions to each individual from a base survey sample of around 55,000 interviews in Australia and 15,000 interviews in New Zealand annually - the largest Single Source databases in the world. The questions asked relate to lifestyle and attitudes, media consumption habits (including TV, radio, newspapers, magazines, cinema, catalogues, pay TV and the Internet), brand and product usage, purchase intentions, retail visitations, service provider preferences, financial information and recreation and leisure activities. This lead product is supported by a nationally networked, consultancy-orientated market research capability.
Samantha Wilson
P: (03) 9224 5268
W: www.roymorgan.com

Keywords

superannuation, finance, cbus, unisuper, first state super, hesta, australian super, sun super

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