Super members relaxed about poor returns
A recent survey carried out by ANOP Research Services suggests that most superannuation fund members are more concerned about the tax component than about poor investment returns over the past year.
Heading the list of consumers' concerns was the safety of funds (47 per cent), followed by the Federal Government's tax take (37 per cent), then low returns (32 per cent), and fees and charges (21 per cent). But the negative returns seem to have made people more aware of their investments with 48 per cent reported having read their annual statements.
The research was commissioned by the Association of Superannuation Funds of 706 people aged between 25 and 64. The survey results surprised ASFA, with CEO Philippa Smith describing fund members' reactions as “fairly benign”. ANOP's Rod Cameron said it's a case of “so far, so good” but he warned the super industry not to be complacent. He said one year's grace may not endure and if more bad years are to come the industry should be preparing the community – carefully, without leading to a loss of faith in super as an investment.
Another survey result was released by ASFA, one undertaken by Ageing Agendas to determine how well people understand product disclosure statements. The survey indicated that ASFA-designed PDSs lead to better understanding than the Government's proposed “ongoing management charge” which has now been abandoned. Eighty per cent of the survey respondents saw the OMC as an additional charge.
Overall, only 10 per cent could answer correctly 90 per cent of the questions on what was in the PDSs. The result was the same whether people were tertiary-qualified or not.
Australian Financial Review, 15/11/02, p71.