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Super members’ intention to switch funds hit record high
Superannuation fund members’ appetite to switch their super fund has surged to a 13-year high, with some 9 per cent intending to switch in the next 12 months, according to research.
Investment Trends’ latest Super Member Engagement Report recorded a 6 per cent rise in the sentiment this year. This coincided with a strong net increase in member engagement levels, as net intention rose by 16 per cent, compared to a rise of 12 per cent in 2022.
According to Irene Guiamatsia, head of research at Investment Trends, the desire to switch funds could be attributed to rising member engagement levels.
“Amidst the superannuation sector experiencing dynamic transformational changes with successor fund transfers, YFYS and even more reform proposals on the horizon, it is unremarkable that members’ engagement levels are rising at an accelerated pace,” she said.
“And as is often the case, greater engagement can open one’s mind to alternative options.”
In the last year, mergers and fund consolidation activity continued to dominate the superannuation sector, with more than 10 mergers and acquisitions in 2022 alone, such as Hostplus and Statewide Super, HESTA and Mercy Super, and QSuper and Sunsuper (now known as Australian Retirement Trust), to name a few.
According to Investment Trends data, the most desired switch was from an industry fund to another industry fund (45 per cent), followed by retail to industry (21 per cent). In comparison, just 9 per cent expressed intentions to move from industry to retail.
Guiamatsia highlighted that younger fund members, like Zoomers and Millennials, were among those most vocal about what information they expected from their super fund and the method they would prefer to consume it by.
According to the report, a super fund’s website was no longer the preferred channel of interaction and had been overtaken by mobile app use.
“Members’ emphatic demand for highly intuitive, mobile-first interactions underscores the importance for super funds to continuously reassess the role of technology right across the member engagement journey,” Guiamatsia said.
“It’s not only crucial for vital information to be accessible, it is equally important (if not more) that such information can be easily actioned, preferably through the same interface.”
The research also found that clear communication during a merger, and of a fund’s sustainability efforts, appeared to hold great value for members.
“Our research uncovered 42 per cent of surveyed members are expressing awareness on [ESG] — offering a key opportunity for funds to build and maintain the trust of their member base,” she added.
AUTHOR
Rhea Nath
Rhea L Nath is a journalist on Super Review and InvestorDaily, with a focus on funds management, superannuation, and institutional investment. Previously, she covered small business and entrepreneurship news at Dynamic Business and multicultural issues at Indian Link Media Group. In 2022, she was named Young Journalist of the Year at the NSW Premier’s Multicultural Communications Awards.
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