SMSF satisfaction rates trump disgruntled retail and industry fund members: Roy Morgan

The government’s proposed changes to superannuation are likely to impact on the most satisfied account holders, the latest Roy Morgan Research Superannuation Satisfaction report suggests.

The government proposes a tax of 15% on super income above $100,000 per annum from July 1 2014, which is expected to impact on around 16,000 super funds with income-earning assets (such as property) of around $ 2 million or more – assuming a return of 5%.

Many of these 16,000 super funds are likely to be self-managed super funds.

According to Roy Morgan, over the six months to January, self-managed super funds, which have a growing proportion of their assets in direct property, remain the clear leader with a 72.2% financial performance satisfaction rating.

And satisfaction with the performance of SMSFS has been rising since about September last year.

In comparison, satisfaction with other fund types, where members have less control, has been declining since the GFC and continues fall.

Industry funds are a distant second with a satisfaction rating of 48.7% with retail funds further back (41.9%).

The results of the survey suggest on overall high-level of dissatisfaction with super fund performance with the satisfaction rating for financial performance of superannuation across all types of funds in the six months to January 2013 of just 46.6%.

The survey also found that satisfaction with financial performance of superannuation increases the bigger the super balance.

The highest satisfaction rating (65.7%) was for funds with balances higher than $500,000 with the satisfaction decline to 56.9% for funds with balances from $250,000 to $499,999; to 48.7% for fund with balances from $100,000 to $249,999 and to just 43.7% for funds with balances under $100,000.

The findings are based on over 30,000 interviews with people with superannuation.

“Our research shows that although there is a strong correlation between satisfaction with superannuation financial performance and the amount in super, the issue regarding who manages the super also has a major impact,” says Norman Morris, industry communications director at Roy Morgan Research.

“It appears that satisfaction with superannuation has a lot to do with the level of engagement, which is higher among self-managed funds and higher balances.

“The poor satisfaction levels of Retail Funds across all balance levels obviously are of concern, considering that financial planners are more likely to direct their clients to them,” he says.

Photo by Martin Howard, courtesy of Flickr. This article first appeared on Property Observer.