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Latest research from Roy Morgan shows industry super funds have increased their lead over retail funds during the past year.
In July 2019, 62.8% of Australian workers with superannuation in an industry fund reported being satisfied with their fund’s financial performance. This is up 1.1% on last year and is well above retail funds, whose member satisfaction came in at 57.4%, down 1.2% from July 2018.
The results are from the Roy Morgan report Satisfaction with Financial Performance of Superannuation in Australia, July 2019 edition, which surveyed more than 50,000 consumers face-to-face including 30,000 with superannuation.
Cbus, one of Australia’s largest industry superannuation funds, rated highest, with 73.2% of its customers claiming satisfaction, followed by Catholic Super at 71.3% and UniSuper at 69.6%.
Industry funds easily dominated the field with nine funds being among the top 12 performers. The three retail funds that rated in the top 12 were Macquarie with 68.2%, Mercer at 64.4% and Suncorp at 61.1%. Funds with the least satisfied customers included AMP at 49.5%, ASGARD at 52.5% and both BT and 100F at 52.8%.
Roy Morgan CEO Michele Levine says the 1.1% increase in the performance of industry funds this past year is equal to the highest satisfaction for industry funds since March 2008, which many consider the onset of the Global Financial Crisis (GFC) with the bankruptcy of US investment bank Bear Stearns.
“The satisfaction of members with performance of their super fund is key to whether a member will continue to hold their super with their current fund or consider choosing a new fund,” says Levine.
“This increase in industry fund satisfaction to some extent tracks the performance of the Australian share-markets, which reached a new record high in July nearly 12 years after their previous high prior to the GFC.”
However, the 1.2% decline in member satisfaction with retail super funds shows there is more to managing superannuation than a high-flying share-market.
“The value Roy Morgan can provide to understanding Australia’s many super funds is shown by analysing members of both Cbus and Macquarie, which shows significant differences between the two sets of clientele,” she says. “For super funds to provide the best service to their members in meeting their needs, it’s vital to understand what sets their members apart from the average.”
Member profiles matter
According to the research, a typical Cbus fund member is a man, aged 35–49, hailing from Victoria and in a full-time job with a salary of $70,000. He is more likely to be in skilled employment than the average Australian and is over-presented in the mid-lower D and E socio-economic quintiles.
“A Cbus member is most likely to be a young parent with primary school aged kids,” says Levine. “Having other people consider them successful is important to them, so they’re concerned about image, wearing the right clothes, driving the right car and living in the right area.”
Cbus members are also more likely to watch soaps, reality TV and televised sports coverage than the average Australian. They’re most likely to be reading magazines about motoring and fishing and listening to commercial radio three hours a day or longer. Plus, they’re twice as likely to be a smoker than the rest of the population.
“Cbus members are middle-class blue-collar Aussies who don’t obsess about their health,” says Levine. The quintessential Cbus member enjoys food from all over the world and restricts how much fattening foods he eats, although he’s far less likely to be a vegetarian or to favour natural health products.
The typical Macquarie member is also likely to be a man, although aged 50+ and from NSW, the state from which two-fifths of Macquarie members are drawn. He is educated with degrees and earns nearly $80,000 a year. His average household income is around $150,000 and he is twice as likely to be in the top socio-economic AB quintile than average Australians.
The quintessential Macquarie member tends to be well insured and make decisions based on logic rather than emotions. He is annoyed by almost all advertising and prefers to invest in something with a safe return. When it comes to media, he is more than four times more likely than the average Australian to watch business-related TV shows and far more likely to watch sci-fi and drama.
He reads business, financial and airline magazines, and is likely to read national newspapers both during the week and on weekends. In contrast to his Cbus counterpart, the Macquarie member is more likely to be a non-smoker.
“The data used here only covers a small part of the in-depth information we have been collecting from superannuation members over the last two decades,” says Levine.
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