Superannuation fund members were slightly less satisfied with their funds’ financial performance over the year to November, according to the latest survey from research house Roy Morgan.
Overall satisfaction levels for November stood at 58.4 per cent, the same as for October but down 0.9 per cent on a year earlier.
However, only 18.5 per cent of fund members said that they were “very satisfied”, down from 19 per cent a year earlier.
The results varied among fund types, with Self-Managed Super Funds (SMSFs) leading the pack with satisfaction levels of 74.3 per cent (down 1.7 percentage points on last year).
Public sector funds came next, satisfaction levels at 69.8 per cent (up 1.8 percentage points over the year).
Both of these funds have relatively high levels of “very satisfied” members: self-managed is in the lead with 32.7 per cent, while the public sector is on 28.5 per cent.
Industry funds retained their lead in satisfaction (59.2 per cent) over retail funds (56.7 per cent) but both have declined over the last 12 months. Industry fund satisfaction fell 1.2 percentage points and retail funds lost 1.4 percentage points.
Both score poorly in what Roy Morgan sees as the critically important “very satisfied” rating, with 17.7 per cent for industry funds and 16 per cent for retail funds.
SMSFs and public sector funds have maintained a clear lead in satisfaction levels for more than 10 years “due mainly to the fact that their members have higher average balances, which are generally associated with higher satisfaction levels regardless of the fund type,” the survey said.
Public-sector fund satisfaction is likely to be driven by the fact they provide additional benefits as a result of government funding, guarantees and conditions that generally don’t exist with other funds.
“The rapid improvement in self-managed fund satisfaction over recent months is most likely to be a result of the generally upward trend in the ASX over this period and this group’s greater personal involvement and awareness in these market movements,” Roy Morgan observed.
Industry funds predominated among the 18 largest funds in terms of consumer satisfaction. CARE Super topped the poll with a satisfaction score of 75 per cent in November, with its satisfaction performance up 10.2 per centage points year-on-year.
It is followed by State Plus on 74.4 per cent (down 3.4 percentage points) and QSuper with 71.7 per cent (down 1.3 percentage points). The most improved over the year was Mercer (up 11.7 percentage points), while Cbus saw the biggest decline (down 7.7 percentage points).
Twelve of the 18 largest funds showed declines in satisfaction over the last year, the survey found.
“Although satisfaction with financial performance of superannuation funds is close to the highest it has been since 2008, it is still very low at only 58.4 per cent, said Roy Morgan industry communications director, Norman Morris.
“If this wasn’t cause enough for concern, less than one in five members consider themselves ‘very satisfied’. This suggests that most fund members are not very committed to their current fund, and could be persuaded to switch funds when they change employers or if their financial advisor recommends it,” he said.
Industry fund performance consistent
“Also significant is the fact that satisfaction among industry-fund members has remained ahead of retail funds for many years, and they both pose a real threat to self– managed funds where high satisfaction is linked to high balances rather than who manages the funds,” Mr Morris said.
“The current government’s extensive rule changes to superannuation and pension eligibility are already creating considerable uncertainty among superannuation members about the future of the system. Combined with the likelihood of increased market volatility and relatively low satisfaction with financial performance of funds, this has the potential to reduce member confidence which is essential in such a long term investment,” he said.