According to findings released by Roy Morgan Research on 20 December 2012, satisfaction with the financial performance of retail superannuation funds has dropped to its lowest level since 2004.
The Australian market research house’s ‘superannuation satisfaction’ report for November indicated that only 41.6 per cent of the 30,000 interview respondents recorded satisfaction with retail funds, as opposed to 49.0 per cent for industry funds, 55.5 per cent for public sector funds and 69.1 per cent for self-managed super funds (SMSFs).
The ‘major retail funds’ received an even lower combined satisfaction rating of 40.1 per cent, with the highest individual major retail fund ranking going to Suncorp (49.0 per cent) followed by Colonial First State (47.1 per cent).
These numbers suggest a 7.1 per cent decrease in satisfaction with retail funds’ performance over the past 12 months, consistent with below-average results over the past five years.
Roy Morgan spokesperson Norman Morris said the satisfaction rate will make competition with industry funds and SMSFs even harder for the retail sector, particularly with respect to the wealth management sphere.
“With the major banks all indicating that they currently plan to grow their wealth management business, the fact that their client satisfaction levels are all well below their major competitors will pose a barrier to this expansion,” Mr Morris said.
“All of the super funds operated by the four major banks have satisfaction levels below 48 per cent, which compares unfavourably with six of the major industry funds all scoring over 50 per cent satisfaction,” he added.
The report attributes the migration to SMSFs – and subsequent satisfaction results – to “poor investment performance and the level of fees and charges” implicit in both retail and, to a lesser extent, industry funds.
In light of disappointing satisfaction results, retail funds will be increasingly relying on loyal financial advisers in attracting new clients, Mr Morris said.
