Young Australians are “overwhelmingly grateful” for their superannuation, despite many not making an active decision to join a fund or select an investment strategy, research reveals.
The 2014 Net Promoter Score Survey (NPS) revealed very little statistical difference between the levels of regret on super of younger versus older Australians, demonstrating a high level of customer satisfaction in a demographic that is often disengaged from the superannuation system.
Australian Tax Office Assistant Commissioner of Superannuation, John Shepherd, said young workers are not always as engaged with their super, reporting that 45 per cent of working Australians between 18 and 35 years-old have multiple accounts.
Australian Prudential and Regulation Authority (APRA) figures show the median figure for fees and charges paid by Australians for a low cost superannuation account is $532 per year.
Separate, research from MLC shows a growing awareness about the importance of planning for retirement in the under 30s, with 52 per cent of young Australians saying putting aside more cash was by far the most important factor when thinking about retirement savings. Investing in more property (32 per cent) and increasing super contributions (28 per cent) drew the next biggest responses.
However, Don O’Sullivan, associate professor of marketing at Melbourne Business School (MBS), said engagement with super was still incredibly low with 68 per cent ending up in a default fund, and only 13 per cent follow recommendations.
“Most Australians do not apply a rational decision making process to their choices about super, they give it about as much thought as buying a bar of chocolate, and unless something goes horrifically wrong, their on-going strategy could best be described as set-and-forget,” O’Sullivan explained.
The results of the NPS show that regret was lowest of all amongst older Australians, according to Ujwal Kayande, professor of marketing at MBS. He added that this was no doubt because older Australians are closest to retirement and accessing their savings.
Joanna Davison, chief executive of the Fund Executives Association (FEAL), said the results of the NPS, and in particular the findings about regret were unexpected yet very revealing.
“When super was first introduced there were grumblings around being forced into something. It has now become the norm and the low statistical difference between young and old Australians attitudes to superannuation is a sign of the maturity of the system,” Davison said.
She added that most funds surveyed received a positive net promoter score (an NPS is a widely use measure of customer loyalty around the world), which is widely seen as a strong result in any industry, and that funds looking to benchmark their performance and identify ways of measuring and improving member satisfaction and engagement were able to take away actionable insights which could be applied to their overall business strategy.
The 2014 Net Promoter Score Survey is an annual joint initiative of FEAL, Customer Service Benchmarking Australia (CSBA) and MBS. The survey assigns a NPS to each fund to benchmark customer satisfaction based on responses collated from over 4,500 interviews with fund members twice a year.