A focus on delivering better services since the Hayne royal commission has led to higher satisfaction for retail super funds than their industry fund counterparts, according to new research findings from CoreData and Professional Planner publisher Conexus Financial.
While industry funds have been focused on promoting their FY25 investment returns over the past week or two, as the Retirement Income Covenant marks its third anniversary the CoreData research shows they’re not winning the battle for retirement.
The researcher’s Best Possible Retirement 2025 report found overall trust for industry funds (48.9) lags the retail sector (56.9).
CoreData global CEO Andrew Inwood tells Professional Planner the success of retail funds is because retirement is handled in combination with advice.
“The other part of it is they lean into the service part of it more,” Inwood says.
Some 67 per cent of pre-retirees and 64 per cent of retirees said they would use a fund-provided advice service if available, and 30 per cent of retirees who were disappointed by their fund said they weren’t made aware of available products and services.
Inwood says this translate to some form of consumer approval for super funds to give more advice, with the proposed Delivering Better Financial Outcomes reform potentially giving funds more scope to deliver advice, despite concerns it would open the door to conflicted advice.
“There’s a real desire and ability for funds to provide to advice and [consumers] have a real warmth to them providing it and there’s a transparent need,” Inwood says.
The report found support services are in demand, with Age Pension advice service the most in-demand, but many members simply don’t know what’s available.
Some 31 per cent of people said they wanted to be made more aware of the retirement products and services available within their fund, while 30 per cent said they wanted more support in accessing Age Pension and government entitlements.
The CoreData research found that Unisuper is the most trusted fund (with an overall score of 62.8) followed by Commonwealth Superannuation Corporation (60.4), AMP (53.1), Aware Super (52.3) and Australian Retirement Trust (51.6).
The researcher had previously noted that AMP’s member satisfaction has risen in the past few years as the embattled wealth giant sought to re-build trust after the royal commission.
CoreData had also warned the most influential super fund chairs the guidance of an external financial adviser is going to be the biggest driving force of member switching in retirement and it was up to funds to offer better services to retain members.
Million-dollar question
The CoreData report found that cost-of-living pressures are reshaping retirement expectations, with pre-retirees now believing they need to accumulate nearly $1 million to retire comfortably.
This figure has jumped by 18 per cent in two years, from $815,848 to $963,550 for pre-retirees, while retirees’ expectations – albeit with lower expectations overall – have jumped by 31 per cent from $629,848 to $824,976.
But this gap between pre-retirees and retirees has narrowed, from $186,000 to $138,574 in 2025.
The research found that nearly half of retirees working part-time do so because they need extra money, with 67 per cent citing that that cost of living was higher than they expected. It found that those with super balances of less than $350,000 are more affected by cost-of-living pressures.
Drawdowns through a pension account remain the most popular option for retirees (46 per cent), with 16 per cent wanting to take out a lump sum and reinvest it; 15 per cent wanting to purchase a lifetime income guarantee product; and 14 per cent taking out a lump sum to put in the bank.
Almost a third (31 per cent) of retirees said they were held back from spending more in retirement, with keeping as much as possible for aged care and other future living needs including healthcare costs.
Not enough or too much
The CoreData research found half of retirees haven’t switched to a pension account – a similar finding as in a report by SMSF administration provider Class – either because they don’t want to or because they don’t feel ready or equipped to.
For those that didn’t switch, it was a case of either having too much or not enough: some 30 per cent cited not having enough for a pension/annuity account, while 21 per cent said they had enough other income so switching wasn’t needed.
The top reason people did switch was on advice from adviser (64 per cent), and 17 per cent switched super to a new fund when moving to drawdown.
The research found retirement income is a top concern and planning support by funds is lacking, with 48 per cent of pre-retirees focused on saving for retirement, and the same proportion also concerned with making their money last.
However, only 33 per cent of pre-retirees feel connected to their financial future, and fewer than half (41 per cent) understand how to reach their retirement goals.
I suggest nobody in the wealth management sector would be remotely surprised by these findings. However, as we’ve seen more than once, Industry Funds themselves are a protected species, aka a ‘moral hazard’.