Spike in super members ready to switch funds

The number of superannuation fund members who are signalling their preparedness to switch funds has hit a 13-year high, according to new analysis from Investment Trends.

The analysis has revealed that 9% of members are indicating an intention to switch funds in the next 12 months, up from 6% in the previous survey period, and this appears to coincide with higher levels of member engagement driven by the superannuation performance test and other factors.

The Investment Trends research found that member engagement levels had jumped from 12% to 16% last year.

Commenting on the findings, Investment Trends head of research, Irene Guiamatasia suggested it was hardly surprising member engagement levels were rising amid the Your Future, Your Super regime.

Guimatsia said that, to unpack the unprecedented spike in member’s intention to switch, the company’s research had delved into members’ pain points and particularly the critical information they sought from their fund – which ultimately could make the difference between them staying or leaving.

It found that, as evidenced by the rate of members reading their outcome assessment (17% in 2023, up from 12% in 2022), this initial engagement is then leading members to interact with their fund in other ways – where access to educational content and approach to ESG initiatives being key areas of importance.

“Members of funds that are undergoing a merger are appreciative of the way their fund has handled communications of a transactional nature. The missing piece appears to be articulating the value-to-members of these mergers, Guiamatsia said. “Funds should be prepared to also clearly articulate and make available information around their ESG investment philosophy. Our research uncovered 42% of surveyed members are expressing awareness on this topic – offering a key opportunity for funds to build and maintain the trust of their member-base.”

Linked to this insight, Zoomers and Millennials were identified amongst those who are most vocal about not only what information they expect from their super fund, but also the method they prefer to consume it by. Mobile app use has surged over the last 2 years across all segments (28%, up from 19% in 2021), overtaking the super fund’s website as the preferred channel for interacting.

“Members’ emphatic demand for highly intuitive, mobile-first, interactions underscores the importance for super funds to continuously reassess the role of technology right across the member engagement journey. It’s not only crucial for vital information to be accessible, it is equally important (if not more) that such information can be easily actioned, preferably through the same interface,” said Guiamatsia.