Industry superannuation funds are making a comeback in the consumer satisfaction stakes as latest Roy Morgan data shows they have edged retail funds for the third consecutive month.
Despite having trailed retail funds for the first seven months of 2017, figures from November how satisfaction with the financial performance of industry funds sits at 59.2%, just higher than retail funds at 57.5%.
QSuper had the highest satisfaction with 70%, followed by Cbus (67.4%), Unisuper (66.4%), First State Super (64.6%) and HESTA (62.3%). Colonial First State was the highest ranking large retail fund, coming in sixth at 61.2%. MLC (55.8%), BT (55.8%), OnePath (54.7%) and AMP (54.2%) followed.
The biggest improvement came from Cbus, which rose 7%, followed by First State Super (up 5.5% points), AMP (up 4.7% points) and Unisuper (up 3.9% points). HOSTPLUS (down 3.7% points) and REST Industry Super (down 3.3% points) saw the greatest losses.
While self-managed superannuation funds still dominate with 71.9% satisfaction recorded, industry funds lead the way when it comes to accounts with balances between $100,000 and $699,999. Retail funds only lead in the under $5000 category with 55.3% satisfaction.
For balances of over $700,000, SMSFs are the pick, with satisfaction rising to 83% in the six months to November 2017. This was slightly ahead of industry funds in the same segment at 80.7%, though well ahead of retail funds on 77.1%.
The overall lead of SMSFs is a result of the fact that they really only operate with larger balance accounts, where satisfaction for all super types is higher, Roy Morgan said.
In contrast, industry and retail funds also incorporate lower balance accounts where satisfaction is much lower.
In considering the numbers, Roy Morgan said the heavily skewed nature of Australia's $2.5 trillion superannuation market must be considered rather than just accepting averages.
The research shows that the 59% of fund members with less than $100,000 in super account for just 13.8% of super funds, whereas those with $700,000 or more may only comprise 4% of members but they account for almost 25% of total funds.
"It is important for super fund members not to be influenced by short term fluctuations in performance across funds, for what is a very long term investment," Roy Morgan industry communications director, Norman Morris said.
"This fact is highlighted in the research which shows that of the fifteen largest funds measured for movements in satisfaction over the last year, nine showed an improvement and six showed a decline. We have seen over the years that these movements are often reversed, making the chasing of short term winners rather precarious."