Choice-wise will stay put
By Ross Kelly
Older Australians and those more educated about super choice are more likely to stay in their existing fund when the new regime is introduced, while the less informed are more likely to constitute the 9 per cent of the population who will switch, according to new research.
The findings come from research by AMP, which involved a rolling study of 500 Australians aged 18 years or more plus a survey of another 500 aged 30 years or more.
“The more educated and aware people become about super choice, the less likely they are to make hasty and inappropriate decisions,” said AMP Financial Services managing director Craig Dunn.
Respondents who were aware of super choice were more likely to stay in their current fund (36 per cent) compared with those who were unaware (20 per cent).
And overall awareness of the super choice regime was found to be increasing.
Although a third of respondents didn’t even know they were receiving super payments from their employer, 84 per cent said they were aware of super choice, up from 64 per cent since the Government launched its super choice advertising campaign.
AMP’s survey found about 9 per cent of those who know they get the super guarantee will exercise choice post-July 1 — a far cry from a recent finding by MLC that 20 per cent of Australians are likely to switch funds.
The 9 per cent finding was down from 14 per cent in April. For those aged 40 or over, the proportion likely to change fell to 6 per cent.
“Among Australians aged 30 or more, seven out of 10 said they were unlikely to change their current super provider,” Dunn said.
“Of this older group, around half who said they were thinking of changing would do so to consolidate their super funds. This is generally a good strategy because it can save on fees and improve the long-term benefits from a consumer’s chosen fund. One in 10 said they would change for better performance, which is generally a bad strategy.”
Another one in 10 said they would change because they wanted to start a self-managed super fund.
AUTHOR
Recommended for you
Sequoia Financial Group has announced it is selling off its Informed Investor subsidiary which it acquired in April 2022.
Wealth Data has examined which advice business model has seen the most growth since the start of the year including those that offer holistic advice.
Research conducted by Elixir Consulting and Lonsec has quantified the efficiency gains of using managed accounts in financial advice practices in hours per week saved.
With only one-quarter of advice practices actively seeking feedback from clients, the Financial Advice Association Australia has emphasised why this is a critical tool for client retention.
