Key findings of the Investment Trends 2013 Member Sentiment & Communications Report:
- MySuper set to become a battleground as competition grows between superannuation funds
- One-way valve to self-managed super funds (SMSFs) causes stress in super industry
- BUSSQ members most satisfied with their super fund
- Member engagement is still a key challenge for super funds
MySuper set to become a battleground as competition grows between superannuation funds
Investment Trends have released the 2013 Sentiment Report.
Proposed MySuper funds are set to become the new battleground for superannuation funds, according to the 2013 Member Sentiment and Communications Report released by leading wealth researcher Investment Trends.
Despite the introduction of Super Choice in 2005, 69% of super fund members are 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,’ said Uwe Helmes, Senior Analyst at Investment Trends. ‘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.’
‘People change super funds when they change jobs or get advice – otherwise, they tend to stay put unless they’re really dissatisfied. That’s why the issue of default MySuper funds is such a big one,’ added Mr Helmes.
One-way valve to SMSFs causes stress in super industry
The research also found that the constant flow of affluent members to SMSFs is proving a challenge to both retail and industry funds. Approximately one million Australians changed super funds in the last year, 6% of whom moved to an SMSF. However, less than 1% of those who changed super funds came back the other way.
‘It’s a one-way valve,’ said Helmes. ‘Once members start an SMSF, they rarely ever go back. However, our research also shows that the majority of members who are considering setting up an SMSF in the future say that there is something their super fund can do to prevent them from leaving.’
BUSSQ members most satisfied with their super fund
Member retention is a key area of focus for super funds and high member satisfaction is one way to ensure that clients stay with the fund. The report found that members of BUSSQ Building Super are the happiest overall in Australia, with 83% of members rating the super fund as either ‘good’ or ‘very good’. State Super rated highest for customer service and value for money, while UniSuper was rated the best at keeping members informed.
Satisfaction continued to improve across super funds overall, but BUSSQ stood out above the rest. ‘Members’ assessment of the advice offering was a key driver for BUSSQ’s high ratings, as well as the company’s arrears process which helps members claim any unpaid super from employers,’ said Mr Helmes.
Member engagement is still a key challenge for super funds
Member engagement with superannuation remains an issue, especially younger members who are often not interested in their super. When asked what would make members under 40 more engaged with their super, being older (36%) and having more super (30%) were most likely to be cited. Besides age and super balance, other key drivers of engagement for younger members included mobile apps (21% of those aged below 40), website login (15%) and a login integrated with their bank account (15%). Currently, the customers of OnePath and BT are most likely to have used a mobile or tablet to access information on their super.
Communication with members via social media was another topic that received a lot of interest among younger members. However, the study found that engagement with super through social media is still in its infancy, with less than 5% of members saying they currently follow any financial services company via social media.