Industry fund satisfaction threatens retail

Retail funds are facing a significant challenge to retain members in the face of higher levels of satisfaction with industry funds, according to the latest research from Roy Morgan Research.

The research, released this week, appears to defy the commonly-held belief that those with high account balances are likely to be happiest within retail funds or self-managed superannuation funds (SMSFs).

The Roy Morgan research, conducted in April, found that industry superannuation funds continued to out-do retail funds for satisfaction with financial performance, with a 60.6 per cent score in the six months to April, compared to 56.9 per cent for retail funds.

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The research found that industry funds increased their satisfaction level over the last 12 months by 1.5 per cent points, while retail funds showed a small decline of 0.1 per cent.

Commenting on the results of the research, Roy Morgan Research industry communications director, Norman Morris said industry funds had now had higher satisfaction than retail funds every month since the survey had begun in 2002.

"Our research shows that industry funds are viewed much more favourably by their members than retail funds when it comes to their performance. Of particular significance is the fact that industry funds have higher satisfaction at all balance levels and in fact they peak at the $700,000 plus level where their satisfaction level is 84 per cent — six points higher than retail funds," he said.

"This segment is the primary group facing potential losses to SMSFs, making it imperative that both industry and retail funds maintain a strong connection and performance with them if they are to avoid losses," Morris said.

The Roy Morgan analysis said that with industry funds achieving good satisfaction levels overall it was worth looking at how individual industry funds are performing.

It rated the best performer amongst the industry funds as being Catholic Super with 77.3 per cent satisfaction, followed by Cbus (67.6 per cent), and HESTA (67.5 per cent).

Roy Morgan rated four of the major funds scored below the industry fund average of 60.6 per cent — Statewide (60.1 per cent), Australian Super (59.1 per cent), MTAA Super (56.9 per cent), and REST Super (56.4 per cent).

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