Young Australians are more likely to take the opportunity to review their superannuation when choice of fund is introduced in July this year, according to a survey conducted by Aviva.
Young Australians are more likely to take the opportunity to review their superannuation when choice of fund is introduced in July this year, according to a survey conducted by Aviva.1
In one of the largest surveys on the subject, 3000 participants aged over 20 years, responded to questions on how they expect to react to the introduction of choice of fund.
More than 30 per cent of all respondents said they will definitely, or are likely, to switch superannuation funds. Interestingly, those aged between 20 and 24 years were more likely to review their situation, with 40 per cent saying they will definitely or are likely to switch superannuation funds.
The introduction of choice of superannuation fund is expected to affect almost five million Australian workers and approximately 650,000 employers.2
The Aviva survey showed the major issues being considered by those who say they are most likely to switch funds are: investment returns (69 percent), fees (49 percent) and security of fund (38 percent).
Rob Donaghy, Aviva’s group director products, marketing and public affairs, says it is good to see so many young people looking to make the most of this new opportunity to choose their own superannuation fund, but cautions against making hasty decisions.
"There are numerous superannuation providers, each with different products and options. It’s important to understand your needs before making a decision. And I highly recommend people seek advice from a financial adviser before making any changes," said Rob.
"Most people have limited knowledge about their superannuation fund, and they tend to focus on investment results and fees. While these are important, they are not the only thing to consider when deciding which super fund best suits your needs," says Rob.
"It’s also pleasing to see many respondents nominate ‘security of fund’ as this is critical given the size of your investment. Since superannuation is probably your second biggest investment choice (after your mortgage) it’s important to understand your needs before making a decision," said Rob.
When considering a superannuation fund it is essential to consider the full range of financial products and services provided.
For instance, a fund may offer the lowest fees in the market but deliver no advice services, may have inadequate insurance and may have limited investment options - making diversity and consistent investment performance harder to achieve.
In the Aviva survey only 29 percent of respondents were concerned about the choice of investment options and only 12 percent believed that the availability of insurance cover was an important aspect to consider.
"These figures are quite concerning as it highlights that people aren’t looking at the whole package when they consider superannuation. It is essential they do so – especially to ensure they find a product that truly suits them as a long term commitment.
Those people who want to find out more about choice of fund and its opportunities, should contact a financial adviser who can create a long term financial plan based on all their needs," said Rob.
1Aviva Choice of Fund Survey, Jan 2005
2The Association of Superannuation Funds of Australia (ASFA), Guide to choice of fund, 2004.
For further information please contact:
Simon Morgan
Group General Manager Public Affairs
Phone: (03) 9829 8892
Mobile: 0407 966 632
Notes to editors:
- Aviva Australia is a group of two specialist financial services companies: Navigator and Norwich Union Life Australia Ltd. Portfolio Partners is the Australian funds management arm of Aviva plc. Through these companies we provide products and services in the areas of wealth creation and wealth protection for more than 300,000 customers throughout Australia.
- Globally, Aviva Australia is part of Aviva plc, the world’s fifth largest insurance group, the largest insurer in the UK and one of the top five life companies in Europe. Aviva was formed in May 2000 through the global merger of CGU plc and Norwich Union plc.
- Aviva is a leading provider of life and pensions products to Europe and has substantial businesses elsewhere around the world. Its main activities are long-term savings, fund management and general insurance. It has premium income and investment sales from continuing operations of A$74 billion, and more than A$592 billion of assets under management (as at 17January 2005). The group has more than 51,000 employees and 30 million customers worldwide.
- The information in this document reflects Aviva Australia’s understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. The information given in this document is of a general nature and has not taken into account the investment objectives, financial situation or particular needs of any particular person and it is not a substitute for professional advice. Applications to invest in a financial product issued by Navigator, or any of its related entities, must be made by completing the application form attached to the applicable Product Disclosure Statement ("PDS"). A PDS is available from Navigator or your financial adviser. Before making an investment decision on the basis of the information above, a prospective investor needs to consider, with or without the assistance of a professional adviser whether the information is appropriate in the light of their particular investment needs, objectives and financial circumstances. Aviva does not receive any remuneration in relation to the provision of information available from this press release which is of a general nature only.