A new Deloitte report debunks the myth that fund switching has been a non-event.
Fund switching may be costing superannuation funds billions of dollars a year, according to Deloitte's Actuaries and Consultants latest analysis of the industry.
In the report analysis - A Multi-Billion Dollar Battle, Deloitte Actuaries and Consultants showed that if industry funds reduced "visible" switching from 2.5 percent to 1.25 percent, by 2021 they would hold an extra $200 billion of pre-retirement assets, and an extra $70 billion of post-retirement assets.
"The competition is already intense, and the battle is being waged in the face of an industry changing shape under the combined impacts of the choice of fund legislation, the 2006 Federal Budget changes, and an aging population that is living longer," Deloitte partner Wayne Walker said.
"Many Australians are exercising choice by remaining in their current fund when they change employment. They are choosing not to move into the default fund of their new employer which goes largely unrecorded and remains invisible," he said.
According to Deloitte it will now be important for funds to improve their ability to engage members and stay relevant.
A number of funds including Buss(Q), REST Superannuation and Sunsuper already have phone-based call centres to enhance their services to members.
In Part 2 of our exclusive series, we ask leading names to nominate their best investments, the most effective industry group and the importance of platforms.
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