Members opt for new generation retail funds


By Julie May

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More members were switching superannuation providers, with new generation direct-to-client funds currently the fastest-growing funds, a report from Investment Trends said yesterday.

The Investment Trends “2015 Member Sentiment and Communications Report” showed one in 10 members switched super funds in the past year, the highest level of switching since 2010.

The clear beneficiaries of the switching activity were the ‘new generation’ of retail funds that were marketed directly to banking clients, Investment Trends said, pointing to BT Super for Life, ANZ Smart Choice and Commonwealth Bank of Australia’s Essential Super as examples.

Investment Trends analyst Irene Guiamatsia said direct-to-client funds had attracted 12 per cent of switchers, and they were appealing to a significantly younger demographic, with half of those who actively chose one of those funds under 30.

“Existing banking relationships are, overwhelmingly, the strongest driver of the [direct-to-client] growth, and some banks have been very successful at using their retail banking channel to grow a base of young members,” Guiamatsia said.

“If they become ‘customers for life’, like transactional banking customers have been, then these funds could transform the Australian superannuation space quite radically in the next few decades.”

Meanwhile, mobile technology was having more of an impact, with one in five members using a smartphone or tablet to access information from their super fund, which was up from 16 per cent last year.

Investment Trends said ANZ Smart Choice, Commonwealth Essential Super and Cbus were the undisputed leaders in the space, but when it came to satisfaction with the content delivered, ESSSuper, AMP and Cbus received the highest ratings among members.

The report also showed super funds had been working hard at engaging with their member base, with 23 per cent of all fund members reporting useful innovations from their main fund, including personalised retirement projections (AMP and AustralianSuper), online fund consolidation (Kinetic Super) and visibility of super from bank accounts (National Australia Bank/MLC).

Despite that, there were still big issues to be addressed, Guiamatsia said, adding overall member satisfaction ratings declined industry wide, particularly in regard to areas such as helping members feel confident about the future, direction on what to do next and providing an advice offering.

Of those funds where overall satisfaction improved the most, Investment Trends mentioned Hostplus, which was up 6 percentage points, AustralianSuper, which was up 5 percentage points, and Commonwealth Superannuation Scheme, up 4 percentage points.

The findings were based on a survey of 16,049 Australian super fund members.

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