SMSFs on top of switching

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In the year to June 2013, self-managed super funds outperformed the industry in attracting the largest net shares of switched products.

For its new report on superannuation and wealth management, research house Roy Morgan evaluated 878 work-based or personal superannuation products which were switched.

SMSFs gained 11% of switched products and lost 2%, giving them a net share of 9% – the top result.

CBA Group had the best performance out of the major retail funds, attracting a net gain of 3.1%. It lost 5.6% of switched products.

In contrast, NAB Group had a net loss of -3.1%. In its research notes, Roy Morgan noted the “large swing away” from NAB suggested members are moving their funds away to SMSFs.

While industry funds attracted a large proportion of switched products at 36.8%, it also experienced 41.7% of funds lost. This suggests these funds are much more susceptible to churn, Roy Morgan said.

The figures show while industry funds so receive a large amount of switching products, a great proportion of switching products also come from industry funds, with over a thirds of all products switched in the last 12 months originating from an industry fund.

SMSF users surveyed were also the least likely to want to switch product in the next 12 months, with only 1.9% considering it ‘very likely’ they would do so. The highest incidence of users very likely to switch in the next year was from AMP Group.   

Industry funds represent 44% of the superannuation products very likely to be switched in the next 12 months, which indicates the high level of churn experienced in the last 12 months is likely to continue in the future, Roy Morgan said.

Fewer Australian superannuation owners – 3.4% – switched super fund in the year to June 2013 compared with the year to June 2012 – 4.9%. This is perhaps a result of increased satisfaction in fund performance, Roy Morgan says.

But the overall proportion of super funds likely to be switched has remained fairly steady over the past five years.

The main reason people switch super fund is because their place of employment changed, then because of investment performance or fees and charges.

Two thirds of those who switched superannuation sought some sort of advice. Forty-five per cent of switchers relied on a professional such as a financial planner or accountant and 35% sought advice from their employer.

SMSF owners continue to rely most on professional advice, while only 20% of those who sought advice before switching to an industry fund relied on professional advice.

The Roy Morgan report contains results and analysis from the most extensive study of consumer financial behaviour in Australia, with over 50,000 annual interviews covering assets and debt, financial products, satisfaction levels and switching intentions.
 

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