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Super laws will dent SMSF satisfaction

SMSFs have held the highest level of financial performance satisfaction compared to public sector funds, industry super and retail funds since 2007, but the complexity of the incoming super legislation could change this, according to the latest survey from Roy Morgan Research.

The group’s single-source survey of over 50,000 consumers, conducted in the six months to November 2016, revealed SMSFs had the highest satisfaction with 74.3 per cent, down 1.7 percentage points over the past year.

This was followed by public sector funds at 69.8 per cent, up 1.8 percentage points over the past year, while industry funds reached 59.2 per cent and retail funds scored 56.7 per cent.

The survey found SMSFs and public sector funds have had a clear lead over industry and retail funds for more than 10 years due mainly to the fact their members had higher average balances, which was generally associated with higher satisfaction levels regardless of the fund type.

In addition, the rapid improvement in SMSF satisfaction in recent months was most likely to be a result of the generally upward trend in the Australian Securities Exchange over this period, combined with this segment’s greater personal involvement in and awareness of these market movements.

However, Roy Morgan Research industry communications director Norman Morris said the current government’s extensive rule changes to superannuation and pension eligibility had already created considerable uncertainty among super members about the future of the system.

Morris said he believed SMSF satisfaction would dip over the coming months as a direct result of the new super regime.

“It’s so complex on top of what was already a complex system, so with this complexity comes nervousness from SMSF members and trustees,” he told selfmanagedsuper.

“And there just must be a loss – if the purpose of these changes is to raise revenue, [then] it’s mainly going to come from the top end.

“That’s going to upset the apple cart because, by definition, if you’re paying more tax at the end of the day, SMSFs are going to be less satisfied.

“Financial planners and administrators are still trying to understand what the rules are, so even they need to be given time.”

In the six months to November 2016, overall satisfaction with the performance of super across all fund types was 58.4 per cent, unchanged from October, but down by 0.9 percentage points over the year.

The Roy Morgan survey included detailed coverage of over 30,000 super fund members.

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