Returns not enough to switch super: CoreData

Many superannuation members will stick with their super fund even if it does not meet their return expectations, according to research from CoreData.

While 57 per cent of respondents said they expected positive returns from their super fund in the next financial year, the same amount said they would not switch funds if return expectations were not met.

CoreData's head of wealth, advice and superannuation Kristen Turnbull said it was encouraging as superannuation was a long-term investment, but it also might be more of a reflection of Australians' feelings towards their super savings.

"People need to remember that superannuation is a long-term investment that is subject to short-term fluctuations. It's encouraging that the majority of respondents are not likely to switch fund if their return for FY11/12 does not meet their expectations; however this is arguably due to apathy on the part of many Australians when it comes to their super," she said.

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More than half of respondents thought their super balance would be the same in the 2012 financial year compared to last financial year, while 29 per cent expected it to be worse.

The average member who expects a positive return expects it to be 7.7 per cent, which was a long way off the reality, Turnbull said.

"The global economy has wreaked havoc on super fund portfolios, and it is highly unlikely that even the most conservative portfolios will achieve the 7.7 per cent return that the average member expecting a positive return is anticipating," she said.

She said higher net worth individuals were a lot more optimistic about positive returns, and less likely than the mass and core affluent to consider switching super funds if expectations were not met. CoreData found 73 per cent of high net worth members were unlikely to switch.