There is a low level of trust in the government’s ability to decide which is the best retirement product for superannuation fund members, with close to 90 per cent of people wanting to make that choice for themselves, according to new consumer polling by the Financial Services Council (FSC).
The online survey of 2531 people, conducted by CT Group between 22 January and 1 February and released as the “Default Superannuation Product Research Report”, found 87 per cent trust themselves over the government in deciding which products they will use.
When asked whether they had more trust in the government or their superannuation fund to make decisions about the retirement products they will use, 73 per cent of respondents chose the latter, but when asked to choose between their fund and themselves, only 30 per cent continued to choose their fund.
Given the choice between having their super fund move them into a default product or choosing or tailoring their own retirement product, 73 per cent opted for the latter, with this figure rising to 77 per cent for those aged 45 to 55 and to 79 per cent for those aged 65 and above.
The research follows the release in December last year of a Treasury discussion paper that included the possible development of default retirement products and standardised products superannuation funds could offer to their members.
FSC chief executive Blake Briggs said the research findings provided a warning to the government and superannuation funds about imposing products and ignoring the views of those heading into retirement.
“National polling shows the Treasurer should be careful not to default superannuation consumers into government-designed retirement products as Australians overwhelmingly support making their own financial decisions at retirement with the support of affordable financial advice,” Briggs said.
“There is significant risk for the government if they were to try and convince Australians that politicians know best determining which retirement products they should use.
“Consumers’ preference for control over their retirement savings is a cautionary warning to superannuation funds that are considering whether to impose one-size-fits-all solutions onto members at retirement.”
He noted, however, there was strong support (76 per cent) for superannuation funds providing basic advice and guidance about which retirement products to choose based on members’ personal circumstances and goals, and 79 per cent of 55 to 64 year olds supported the provision of retirement advice by their fund.
