Fee reductions main motivator for fund mergers

Cost and fee reductions have emerged as the primary reason for funds to consider merging, according to survey conducted by Super Review.

The survey, conducted during last November's Association of Superannuation Funds of Australia annual conference in Brisbane, asked delegates to rank what they believed made a fund merger consistent with the best interests of members.

The survey, sponsored by Pillar Administration, found that reduced fees due to scale emerged as the most important factor, far outweighing both improved investment performance and greater security as reasons to justify a fund merger.

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The second most important justification for a fund merger was cited as being enhanced products and services, with improved investment performance being rated least important.

Nearly 60 per cent of respondents rated reduced fees due to scale as being either the first or second most important reason for a fund merger, while barely 30 per cent of respondents felt the same way about investment returns.

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