Powered by MOMENTUM MEDIA

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Survey of 50,000 shows little movement on super selections

Australia Sydney

Employers remain the largest driver of driving Australians to superannuation products, despite mounting criticism about the workings of default superannuation funds.

The Roy Morgan Single Source survey for the 12 months to August, based on interviews with 50,000 consumers, showed employers still play a major role, accounting for 60 per cent of the market.

Roy Morgan said the default fund option provided by employers is still the most common choice for consumers.

Intermediaries, like financial advisers, only account for 32 per cent when it comes to superannuation products.

Advertisement
Advertisement

Employees being put into default superannuation accounts is often at the heart of savings-drains, like Australians holding multiple superannuation funds.

The Productivity Commission found that one-third of all accounts, 10 million in total, are rather duplicate accounts unintentionally held by members. Such accounts, the report explained, erode the balances of members by $2.6 billion a year through unnecessary fees and insurance.

Alongside this, rivalry between funds across both the default and choice segments was found to be lacking, with product proliferation and a range of underperforming funds limiting competition for consumers and resulting in at least 1.6 million accounts in default options potentially losing half of their balance by retirement.

Proposed changes

Under the changes proposed by the commission, those new to the workforce would be able to elect their own super product from a “best in show” shortlist of funds developed by an independent expert panel.

Once allocated to the default fund of their choice, the member will remain with the same fund for life unless they choose to change.

So far, this proposal has had a mixed reaction from the superannuation market, which you can read more about here.


Survey of 50,000 shows little movement on super selections
Australia Sydney
nestegg logo
subscribe to our newsletter sign up
FROM THE WEB
Recommended by Spike Native Network
Anonymous - This is silly. Most countries would think 3 per cent was fantastically low. Further, who measures how much economic activity is being destroyed by.......
Anonymous - What a load of rot! What is he comparing the detriment to, and how much does the GFC effects factor into his farcical calculations? ....
Anonymous - In other words, sack advisers and cut costs. It's the financial version of #me too movement.....
Anonymous - If that's after tax pay then I'm screwed.....