Value for money has regained its position as the number one factor Australians take into consideration when choosing a new superannuation fund, new research has found.
The research, a joint venture between CoreData Research and Conexus Financial, the publisher of Professional Planner, reflects a general concern over cost-of-living pressures and a general downgrading of factors such as social responsibility, alignment with members’ values, and emotional appeal.
CoreData research consultant Alana Devitt says an individual’s fund selection decisions are driven primarily by a cluster of three factors: value for money, trustworthiness and stability and reputation. This is followed by a second cluster: competitive price, competitive performance, customer focus and convenience. And a third cluster of less-important factors – including authenticity, alignment to a member’s values, social responsibility, being innovative and progressive, being distinctive and being emotionally appealing – has actually declined in importance in the latest research.
“You can see it kind of falls into three different buckets,” Devitt says.
“The number one bucket for consumers is value for money, trustworthiness and stable and reputable. And really what that is screaming out is that members are really just looking for that stability: I trust my fund has my back; I trust I’m getting the correct service; and I’m not being overcharged.
“Then it falls into the second bucket of price, investment, performance, customer focus, convenient, which would be very typical.
“And then lastly, you can see a lot of the drops [in importance] here for all of those more emotional, fluffy things, which is alignment to my values, socially responsible. And we know from previous research that what happens when times get hard is people stop caring about being socially responsible because they’re trying to feed their kids, essentially.”
In the latest wave of the CoreData/Conexus Financial member engagement research, value for money emerged as the single most important factor in attracting new members to funds. It overtook trustworthiness but had been the top-ranked factor in earlier waves of the research conducted in 2022 and 2023. Devitt says trust and value for money are closely linked factors.
“Value for money rises above trust, but… because they’re so close, they fall hand in hand,” she says
Devitt says this reflects people’s need to feel confident in simple things, like “my fund has my back [and] I just feel like I need to be getting a good service for what I’m paying”.
“So even though [value for money] is overtaking [trust], which is quite interesting, it actually still actually falls hand-in-hand. It’s perceived value, and perceived value only happens with trust,” she says. “They’re almost as important as each other, because you can’t have one without the other.”
Another factor in play
The research also suggests that if a fund is performing well on the “Big Three” factors it will not only be appealing to potential new members but also perform well in retaining existing members. There’s some evidence that funds with higher levels of member trust tend to be less at risk of members switching to another fund. But when it comes to member retention another factor also comes into play: good member communication.
“It feeds into that narrative of increased communications equals more transparency, or perceived transparency, to members in their fund, which helps overall increase trust,” Devitt says.
“[It’s] one thing a fund being this way, but it needs to communicate that to its members. People are naturally disengaged with their superannuation, they’re disengaged right up until life events like getting married, something happening, their kids going to college.
“So when they do re-engage with their fund, which is also the time when they consider switching, that communication needs to be there. Those messages need to be there of the best price, the best performance and the best service.”
While the research found that Australians generally have greater trust in profit-to-member funds than in retail funds, it also found that on the specific issue of member satisfaction with their fund’s communications it’s retail funds that lead the way.
More than nine in 10 (92 per cent) AMP super fund members said they were very or somewhat satisfied with the member communications they receive from their fund and 89 per cent of CBA Essential Super members said the same. Retail funds filled four of the top seven places for member comms.
AMP was also the fund whose members said they felt most valued, and among a group of funds – the others were Aware, ART, Colonial First State and Cbus – whose members were least likely to switch to another fund.
