More Australians are paying attention to their super than ever before.
Between the fluctuating market, general economic instability, and the early release of super scheme, consumers are logging into their accounts – often for the first time – and may be a bit surprised by they find.
In their 2020 Super Fund Member Sentiment and Communications Report, Investment Trends found that members are surprisingly optimistic about the future recovery. After the market selloff in March, about half of those surveyed believe it will take a year or more for their super balance to recover fully. About a quarter think we'll see a full recovery by the end of 2020.
Investment Trends' King Loong Choi is the senior analyst behind the report, which surveyed 6,383 people.
Based on the findings, he says that member engagement is growing.
"As members scrutinize their super balance and performance more closely, it is important that super funds continue keeping members informed, educated and confident in weathering heightened market volatility."
When they log into their accounts, Choi says that people are finding investment options that aren't meeting their needs. "At present, just 61% of members believe their super fund's range of investment options is sufficient to meet their needs while 31% say they are unsure, further highlighting the need to alleviate members' knowledge gaps."
The value of member education
More than 2/3 members have asked their fund for guidance, though most about basic information like fees or insurance premiums. Some ask more detailed questions, like what their balance could be at retirement and how much they need to retire comfortably.
The more people engage with their fund, the higher their confidence and satisfaction with that organisation. The composite satisfaction score in the Investment Trends research shows 65% for those who haven't contacted their fund compared to a 72% satisfaction for those who have.
"It is vital that super funds continue promoting and facilitating their member guidance services, given its positive, tangible impact in lifting member engagement and confidence, said Choi.
"Confident, well-supported members are more satisfied with their super fund and empowered to take steps to improve their situation in retirement."
Best, it makes those members more likely to stick with their fund for the long term. "After seeking guidance from their super fund, three in four members are driven to take action, most often to compare super funds (23%), make voluntary contributions (20%), consolidate their funds (19%) or change investment options (19%).
Who is doing it best?
The highest overall member satisfaction numbers came from industry funds. ESSSuper, UniSuper, and Australian Catholic Superannuation were at the top of the ratings said Choi, however the majority saw fairly consistent satisfaction numbers from members in the survey – this despite the pandemic and recent legislative changes.
"Super funds have done well to maintain member satisfaction levels despite unprecedented macro headwinds," said Choi.
Areas for improvement
This isn't to say there aren't areas for improvement. "At the industry level, the communications provided by super funds during the pandemic have been effective in lifting satisfaction ratings and reducing associated satisfaction gaps," said Choi. "However, there is still room to improve the frequency and quality of communications outside of annual statements."