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Super fees gnaw at members’ minds
Almost three-quarters of super members believe super funds, their fees and the way they work are not transparent enough, according to a report.
The FSC-ING Direct Superannuation Sentiment Index 2014 showed 71 per cent believe this to be true, with many saying they were not well-informed on how their funds operated, and felt there was a lack of disclosure or control.
"Perception of fees has declined, indicating a clear need for the industry to make clearer the link between higher returns and costs of managing the growth asset," Financial Services Council CEO John Brogden said.
When it came to judgement of value from fees, the index dropped to 87 compared to last year's 92.
The survey also showed only half (49 per cent) know how much fees they are paying, with only 15 per cent definitely sure.
The survey also showed 35 per cent think fees are too high despite higher returns.
Most Australians (86 per cent) support the superannuation system, but only 53 per cent feel informed enough to make decisions; 83 per cent see it as "essential in providing a comfortable retirement".
Despite seeing super as providing stability and certainty (64 per cent, up nine points from 2013), 65 per cent feel affected by "actual or proposed continuous change", up six points.
Similar to last year, 76 per cent hold just one super fund, with 64 per cent in industry funds. Most (64 per cent) simply defaulted to their employer's fund, showing that consumers are not getting too involved in the decision-making process.
Twenty-seven per cent of people intend on changing their super fund in the future.
"Our focus group research suggests a growing feeling of freedom and comfort with changing due to the post-GFC climate, a more competitive sector and a growing feeling that many are paying too high a fee at with their current providers," the report said.
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