Higher-balance SMSFs lead in satisfaction

The SMSF segment leads in superannuation satisfaction among those in the higher-balance bracket, but industry funds lead them and retail funds in the lower-balance segments, according to Roy Morgan research.

Roy Morgan’s “November Superannuation Satisfaction Report” showed in the six months to November 2017, the satisfaction with SMSFs where balances were $700,000 or more was 83 per cent, up 3.1 percentage points from November 2016.

SMSFs were only marginally ahead of industry funds in this segment, with satisfaction levels of 80.7 per cent (up 0.8 percentage points), but well ahead of retail funds on 77.1 per cent (up 1.8 percentage points).

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), was due to them mainly operating with larger-balance accounts, where satisfaction for all superannuation types was higher. Industry and retail funds, on the other hand, also operated with lower-balance accounts, such as the under $100,000 segment where satisfaction was much lower.

Roy Morgan industry communications director Norman Morris said most fund members would not be engaged enough to closely track superannuation performance tables, but would rather act or not on how they felt about the performance of their current fund.

“To understand this, our research has highlighted the need to measure members’ satisfaction with performance overall and by account balance,” Morris said.

“For example, those with $700,000 or more in superannuation account for only 4 per cent of fund members and yet hold 24.1 per cent of the total funds in superannuation, making the understanding of the satisfaction of this group critical.

“It is in this segment that SMSFs are having major success against industry and retail funds and where satisfaction is highest.”

The research showed 59 per cent of fund members had less than $100,000 in superannuation and they accounted for only 13.8 per cent of total superannuation funds. At the top end, those with $700,000 or more in super accounted for only 4 per cent of members but nearly one-quarter (24.1 per cent) of superannuation funds.

“This data highlights the need to analyse satisfaction levels by dollar values because of the much greater significance in retaining and attracting the higher-balance fund members,” the research said.

Industry funds lead SMSFs and retail funds in balances between $100,000 and $699,999.

Copyright © SMS Magazine 2024

ABN 43 564 725 109

Benchmark Media

Site design Red Cloud Digital