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Just 54 per cent of Australians are satisfied with their superannuation fund’s financial performance, according to a survey by Roy Morgan Research.
“Current market conditions are likely to see this begin to decline,” says Roy Morgan whose survey was based on interviews with 50,000 people a year of whom about 30,000 people have superannuation.
The proportion of those who switched superannuation fund managers was 3.2 per cent as of June 2011. That is up from 2.3 per cent in June 2010.
Australia’s superannuation market was $1.2 trillion as of June 2011. Women make up more than half the country’s population but hold 36 per cent of superannuation’s assets.
“Superannuation is not performing well and people are pretty disillusioned at the moment with so many negative headlines,” says Norman Morris, industry communications director at Roy Morgan.
“The prospect of increased contributions may annoy people further,” says Morris.
Industry funds accounted for 44 per cent of wealth management customers in Australia including superannuation, pensions and annuities as of June 2011. Public sector funds accounted for 13 per cent.
AMP Ltd. had market share of wealth management customers of 6.8 per cent as of June 2011. Commonwealth Bank of Australia Ltd. and its fund management unit Colonial had a 6.5 per cent market share.
National Australia Bank Ltd. and its unit MLC had a 5.2 per cent market share as of June 2011. Westpac Banking Corp. had a 3.7 per cent share.
Fifty two per cent of CBA customers are satisfied with their fund’s performance as of June 2011. Fifty per cent of Westpac’s customers are satisfied with their fund managers, as are half of NAB’s customers.
Forty eight per cent of AMP’s customers are satisfied with their fund managers as of June 2011.
Sixty one per cent of public sector fund customers are satisfied with their fund managers as of June 2011. Fifty four per cent of industry fund customers are satisfied with their fund managers.
Sixty five per cent of Catholic Super’s customers are satisfied with the fund as of June 2011. Sixty per cent of LUCRF Super’s customers are satisfied with the fund’s performance while 57 per cent of Cbus and HESTA’s customers are satisfied.
Fifty one per cent of MTAA Super’s customers are satisfied with the fund’s performance as of June 2011, down from 59 per cent in June 2010.
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What Norman really means, of course, is that capitalism and markets are not performing well and superannuation is doing no more nor less than reflecting that. Let’s call a spade a spade – and an unpredictable, irrational economic system something that is increasingly undesirable to be the foundation of retirement incomes.
If the Federal Government and Bill Shorten were really serious about retirement incomes they could keep the SGC moving towards the 15% target but create infrastructure and other Government Bonds paying 7 or 8% guaranteed that all of us would leap at the opportunity to invest in. Half or more of Super’s $1.3 trillion builds lots of good things. renewable energy, railways, schools, housing, hospitals etc etc.
Just think of it – 7 or 8% every year guaranteed, no governance issues, no hedging or currency gambling and no reliance on a market where those who are able to predict the collapses don’t have any responsibility to the common good and do nothing more than make money from them.
And just where are the magical investments underlying this “guaranteed” return that will protect taxpayers from being involved in some massive Ponzi scheme?
Cash rates are 4% and bond yields are 4% to 6%.nA guaranteed 8% per year on $1.3 trillion might require support of over $100 billion in a year where the underlying investments returned zero!
Just another magic pudding idea.
What is the real issue: superannuation is a badly designed, badly misunderstood, tax shelter for upper income earners that won’t reduce the long-term cost of paying pensions unless returns exceed the magic pudding levels described above.
What is most surprising to me is that this percentage is as high as it is and shows that the super funds mentioned are actually doing a good job communicating with their members. The real issue for superannuants is though that many super funds don’t really understand the true nature of value-destroying risks that are out there.
Jeeze Dennis, are you and I the only people at work?