SMSF threat still rattling retail funds

CoreData said its research – which assessed the intentions of 834 super fund members to stay with or leave their funds – found members were attracted to SMSFs due to the services they provide over the funds they currently belong to.

"Our research [found] that providing SMSF services, regular communications and free advice are other strategies APRA-regulated funds can pursue to retain their members," CoreData head of financial services Kristen Turnbull said.

"Two in five respondents in APRA-regulated funds say regular communication is something funds need to do to keep their business. However, one in five only hear from their fund once a year or less."

Ms Turnbull also pointed out CoreData’s research found that across all the respondents, fund members' intentions to switch have decreased in recent years.

“However, a decline in switching intention is not necessarily reflective of higher loyalty with their existing fund; it could just as likely indicate apathy on the part of members,” Ms Turnbull said.

“Recent CoreData research has found many of the traditional engagement indicators are actually highly correlated with switching intent. It could be that your most active members are actually those most likely to leave you," she said.

"These findings, in addition to past research which found that member engagement is at its highest level in three years, are certainly encouraging for APRA-regulated funds,” Ms Turnbull added.

Written by Scott Hodder

Last Updated: 06 November 2014

Published: 06 November 2014