Heavy promotion of super choice is failing to sway Australia’s $1.15 trillion in super, with almost a quarter of people still leaving it to their employer to put their retirement savings into a default fund.
Fresh data from the Investment and Financial Services Association (IFSA) and research house Investment Trends shows 22 per cent of people who switched super funds said it was their employer’s choice.
Almost half (47 per cent) of those who switched or thought about it did not shop around and half thought they did not need to do so.
Apathy still plays a role – 60 per cent of people surveyed said they knew they could get a better deal on their super elsewhere but either have no time or did not think it was worth the effort to change.
Advice from a financial planner triggered 15 per cent of switchers.
The main reasons for switchers included performance (15 per cent), an existing relationship with a fund (13 per cent) and fees (11 per cent).
Seven per cent of working Australians switched super providers between October 2005 and October 2006, while 12 per cent considered it.
Changing jobs and terminating a job accounted for more than half of the reasons why someone switched.
“For the first time, we have viewed the superannuation decision making process from the customer’s perspective and now have a clear picture of where the industry needs to lift its game,” IFSA chief executive Richard Gilbert said.
He said satisfaction levels are high but people want shorter documents.
“We can’t ignore the fact that customers are still calling for shorter documents that are presented well and written in plain English,” Gilbert said.
“We know that that information on performance, risk, investment options and fees is most important to people – all areas where we’re told the documents can be improved.”
Data from the Australian Prudential Regulation Authority released last week shows Australia’s super assets now stand at $1.15 trillion, a 25 per cent increase over the year to June 2007.
