Satisfaction with super funds is increasing, but members still want more: Investment Trends

From

King Loong Choi

Investment Trends has released its flagship 2018 Super Fund Member Sentiment and Communications Report, an in-depth study of super fund members’ attitudes, behaviours, needs and priorities. The report, now in its eleventh year, draws on the responses of more than 10,000 super fund members conducted in May 2018.

This year’s study highlights a number of important trends:

Key highlights from the 2018 Member Sentiment and Communications Report:

  • Satisfaction with super funds is increasing, but members still want more
  • Super fund switching intentions are on the rise
  • Digital channels are key to greater member engagement
  • Satisfaction with super funds is increasing, but members still want more

Satisfaction with super funds rose for the second consecutive year, according to the latest research from Investment Trends. Nationwide, 71% of super fund members rated their overall satisfaction with their main super fund as ‘good’ or ‘very good’ in 2018, up from 69% in 2017 and 64% in 2016.

“Super funds have excelled at lifting member satisfaction, especially during a period of subdued investment performance from domestic equities,” said King Loong Choi, Senior Analyst at Investment Trends. “Still, super funds cannot rest on their laurels, given the fundamental shifts that are expected to flow from the Productivity Commission and the Royal Commission.”

“Member guidance services have been a key and persistent satisfaction gap for the industry, and super funds can do more to help their members feel confident about their future in retirement,” explained Choi. “Super funds can make a difference through a variety of channels, especially webinars, face to face workshops, and the provision of financial advice services,” added Choi.

Super fund switching intentions are on the rise

The number of Australians thinking of switching their super fund is at a record high, with 7% of members intending to leave their super fund in the next 12 months, up from the 5% levels observed in previous years.

“The growing intention to switch super funds is predominantly driven by younger Australians, with 16% of those aged between 18 and 34 saying they intend to do so,” said Choi.

While high fees is the key motivator for switching (30% cite this), millennials are more likely to seek a fund that provides access to socially responsible investment options (14%).

“Ethical and socially responsible investing is gradually gaining popularity, and super funds that cater to this growing demand will stand out among younger Australians,” added Choi.

Digital channels are key to greater member engagement

A separate study by Investment Trends of Australia’s largest 44 super funds – the 2018 Investment Trends Member Engagement Report – revealed that many super funds are on the path of digital transformation, moving from a simple online presence towards channels that foster a more interactive and engaging experience for their members. For instance, the last 12 months saw an increased number of mobile apps, increased social media activity, and direct engagement through online chat and bot-based applications by super funds.

Super fund members themselves appear to be embracing this development. In 2018, over a quarter of members (26%) said they used a smartphone or tablet device to access information from their main super fund, up from just 16% in 2014. In addition, members most often say they prefer to access information about their super account through an online statement (41%) and the fund’s website or mobile app (30%), ahead of paper statements (21%).

“Technological advancement is evolving how consumers interact with their product and service providers and raising their level of expectations at the same time,” said Choi. “Recent website developments from HESTA, Sunsuper and AustralianSuper show that many funds are focused on lifting member engagement levels, and the industry must continue to develop digital capabilities, with a ‘member first’ approach in mind.”

About the report

The Investment Trends 2018 Member Sentiment and Communications Report provides a detailed analysis of the Australian superannuation industry, examining sentiment, attitudes and needs of superannuation fund members.

Based on a survey of 11,112 respondents, the Report is the largest and most comprehensive independent study of Australian super fund members.

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