Super fund member loyalty is on the rise: 2019 Super Fund Member Sentiment and Communications Report

Investment Trends has released its flagship 2019 Super Fund Member Sentiment and Communications Report, an in-depth look at the attitudes, needs and priorities of Australian super fund members.

The twelfth annual addition of the report draws on the views of more than 9,000 super fund members conducted in May 2019.

Key highlights:

• Super fund loyalty is on the rise
• There is significant appetite for advice and education
• Responsible investing is an important retention tool – not just for younger members
• ESSSuper, UniSuper and Cbus lead in satisfaction rankings

Super fund loyalty is on the rise

Australians are more likely to stay with their existing super fund when they change employers. The latest research shows that among super fund members who changed jobs in the last three years, the vast majority (63%) said they remained with their current fund instead of joining their new employer’s default option (up from 54% in 2017).

“When changing jobs, more Australians are making a conscious decision to stay with their current super fund instead of passively accepting their new employer’s default option,” said King Loong Choi, Senior Analyst at Investment Trends.

“Increased marketing efforts by industry super funds and recent rumblings from the Royal Commission have further raised consciousness around superannuation, prompting more Australians to move from casual to mindful stewards of their own super.”

“While Australians are increasingly loyal to their existing super fund, the industry cannot rest on its laurels in supporting, educating and informing its members,” added Choi.

There is significant appetite for advice and education

Three quarters of super fund members interacted with their super fund in some way, shape or form in the last 12 months, most often by reading the annual statement (39%), visiting their fund’s website (28%) or reading regular communications (28%).

However, many members wanted to engage with their super fund at a deeper level but were unsuccessful in their endeavours. Across 22 super-related activities observed, the most commonly unresolved member issues were seeking financial advice (face-to-face), comparing their super fund to other funds, accessing their super through a mobile device, attending a seminar and accessing educational content.

“The most commonly unaddressed super-related activities were also those perceived as the most difficult to conduct,” said Choi. “Given members’ significant appetite for advice and education, super funds must improve their access to the services most sought after by their members.”

Responsible investing is an important retention tool – not just for younger members

Responsible investing is gradually gaining traction as more Australians realise they can align their ethical, environmental, social and governance (ESG) beliefs to the investments they hold.

In fact, a third of super fund members (34%) said it was ‘very important’ that their super fund offer responsible investing options among their range of investment funds.

Delving deeper, this perception increases with age, with 43% of retirees saying responsible investing is ‘very important’ versus 28% for millennials – contrary to the popular belief that ESG-factors resonate more strongly among younger Australians.

“There is strong interest in ESG-centric investments within super among Australians young and old. While the current product range is playing catch up to consumer demand, this represents an opportunity for super funds to differentiate,” explained Choi.

ESSSuper, UniSuper and Cbus lead in satisfaction rankings

Each year, Investment Trends measures member satisfaction with their main super fund across 26 key service areas, including their overall satisfaction. In 2019, the highest rated super funds by overall satisfaction were ESSSuper, UniSuper and Cbus.

Across individual service areas, industry wide member satisfaction was highest for the website and quality of the annual statement, while the lowest rated were webinars, seminars/workshops, videos/educational materials and the advice offering.

“An industry wide gap exists for education initiatives, with satisfaction for webinars, seminars and education materials lagging behind satisfaction for fees and charges,” said Choi. “This highlights members’ appetite to learn more in their quest to engage more deeply with their super.”

About the report

The Investment Trends 2019 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 9,018 respondents, the Report is the largest and most comprehensive independent study of Australian super fund members.