Major super funds win popularity contest

Peter Philip

The number of people who switch superannuation funds continues to grow at a steady pace, with large, established funds benefiting most from the new super choice rules, according to financial services system support provider InvestmentLink.

An InvestmentLink survey of 1.3 million of its members found the number of employees who opt for superannuation funds other than their employer’s default fund is increasing by 6,000 to 7,000 per month and shows no signs of slowing.

Of InvestmentLink’s top 40 ranked super funds, 25 were industry funds and 15 were retail. Topping the popularity stakes was industry fund Australian Super, the merger of ARF and STA, with 14.34 per cent of the membership. Next best was retail super giant AMP with 10.33 per cent of the membership, followed by industry fund REST and retail funds CFS and ING with 5.94 per cent, 5.37 per cent and 5.21 per cent of the membership respectively.

InvestmentLink chief executive Peter Philip said there was a noticeable tilt toward mass-market funds that deliver superannuation to both employers and employees.

The research also found self-managed super funds (SMSFs) were growing in popularity and are now the eighth most significant choice.

Philip said the primary driver of growth is new employees opting to complete the super choice form rather than existing employees deciding to switch.

He said the research shows that barriers to entry to the superannuation industry remain high. He pointed out that Virgin’s new fund, Virgin Super, ranks just 33rd despite considerable “marketing fanfare”.

“But we also think the results have significant long-term impacts for the establishment. If 5 per cent of Australians every year keep selecting a new fund, the world may look very different decades down the track.”