Retirement, SMSF, Superannuation

$250,000 threshold for member moves

Investment Trends Ludovic Sevestre survey Superannuation switching member engagement Self-directed

A super balance of $250,000 is the threshold at which fund members are seeking more from their provider, with those aged 45 more likely to look at switching.

A balance of $250,000 has been identified as a key point at which people are seeking more engagement with their superannuation fund, with self-directed members more likely to switch to another provider, according to Investment Trends.

The research firm’s “2024 Super Member Engagement Report”, based on a survey of 10,866 respondents in February and March, found engagement levels were high for those with balances of $250,000 or more and this was an inflection point for engagement with their fund.

Investment Trends associate research director Ludovic Sevestre said: “Member engagement with their super fund continues to increase as many more look to take matters into their own hands when it comes to retirement planning.

“Our data also reveals that the more interactions non-retirees have had with their super fund over the past year, the more likely they are to start thinking about retirement.”

The report also found that while the number of people who switched funds fell slightly from 9 per cent last year to 8 per cent this year, the intention to move climbed from 9 per cent to 10 per cent, particularly among self-directed members aged 45 to 65.

Sevestre said change of employment was a key driver across the board, while people moved from a retail fund to an industry fund because of low performance and higher fees and those switching from an industry fund to a retail fund were seeking wider investment choices, particularly in the environmental, social and governance space.

He noted the report did not examine the shift from retail and industry funds to SMSFs, but there was a trend among younger, self-directed fund members to set one up, which had been identified in the research firm’s recent “2024 Vanguard/Investment Trends SMSF Report”.

The $250,000 figure cited by Investment Trends was slightly higher than the figure referenced in research commissioned by the SMSF Association, which found SMSFs with a balance of $200,000 had performance and running costs on par with Australian Prudential Regulation Authority-regulated funds.

“The persistently high switching intentions among self-directed members highlight the opportunity for super funds to build trust early and demonstrate consistent performance over time,” Sevestre said.

“They can proactively combat churn and enhance member loyalty by taking heed of the feedback their members have provided through this survey, but also by actively monitoring member engagement across their various service channels.”

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