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More super funds members eye move to SMSFs

One in five super fund members may leave to set up self-managed super funds (SMSFs) in the next five years, new research by CoreData shows.

A further quarter could move to another fund during the period.

CoreData questioned 668 members of industry, retail or corporate super funds.

The proportion looking to set up SMSFs in the next year has grown to 7.8% this year from 4.1% in last year’s study.

The figures will concern group life insurers, because when members leave they often do not set up new insurance policies in their SMSFs. Insurance held in SMSFs has a penetration level of less than 1%, and this has remained static for many years.

High fees, including group life premiums, are key drivers in switching or leaving funds, the research shows.

CoreData Principal Andrew Inwood says super funds will not like the figures, “but stronger switching intention actually presents growth opportunities for funds if they are able to demonstrate value and utility to set them apart”.

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