Industry superannuation funds have boosted their level of satisfaction among members according to Roy Morgan’s latest survey. It put satisfaction levels for industry funds at 59.2 per cent, which was higher than the same for retail funds (57.5 per cent) for the third consecutive month, after having trailed them for the seven months prior.
Self-managed super funds came in on top with satisfaction levels at 71.9 per cent, despite sliding by 2.4 per centage points over the last year. However investors with higher fund balances were happier with their funds overall.
In the six months to November 2017, the satisfaction with SMSFs where balances were $700,000 or more was 83.0 per cent, up 3.1 per cent points in the last 12 months and only marginally ahead of industry funds in this segment with 80.7 per cent (up 0.8 points) but well ahead of retail funds on 77.1 per cent (up 1.8 points).
Although SMSFs are the satisfaction leader in the $700,000 plus segment, industry funds lead them and retail funds in balances between $100,000 and $699,999. Retail funds only lead in the under $5,000 segment with 55.3 per cent satisfaction, compared to 46.3 per cent for industry funds.
The overall lead in satisfaction among SMSFs (71.9 per cent compared to industry funds 59.2 per cent and retail funds 57.5 per cent) is driven by the fact that they have a heavy weighting to larger balance accounts, where satisfaction for all super types is higher, Roy Morgan found.
By contrast, industry and retail funds also operate in the environment of lower balance accounts, such as the under $100,000, where satisfaction is much lower.
The heavily skewed superannuation market
The headline figure of around $2.5 trillion in superannuation is headline catching Roy Morgan points out that the system is inequitable in terms of balance size.
This chart shows that 59 per cent of fund members have less than $100,000 in super and they account for only 13.8 per cent of total superannuation funds. At the top end, those with $700,000 or more in super account for only 4 per cent of members but nearly a quarter (24.1 per cent) of superannuation funds under management.
These are the top fund satisfaction performers
Across the fifteen largest super funds (based on number of members), Qsuper had the highest satisfaction with 70.0 per cent, followed by Cbus (67.4 per cent), Unisuper (66.4 per cent), First State Super (64.6 per cent) and HESTA (62.3 per cent). The best performer among the largest retail funds was Colonial First State in sixth place overall with a satisfaction rating of 61.2 per cent, followed by MLC (55.8 per cent), BT (55.8 per cent), OnePath (54.7 per cent) and AMP (54.2 per cent).
“Retail funds were holding a narrow lead in satisfaction over industry funds for most of the past year but in the last three months industry funds have regained the lead that they had been holding for the past decade. Industry funds currently have higher satisfaction levels than retail funds for all segments over $5,000 and are only narrowly behind satisfaction with SMSFs in the all important $700,000 and over segment,” said Roy Morgan director Norman Morris.
“With continued gains being made by SMSFs in funds under management, it is worth noting in the $100,000 to under $700,000 segment, where 62.1 per cent of all superannuation funds are held, that industry funds lead in satisfaction over SMSFs,” he said
The New Daily is owned by industry super funds