SME Employer Attitudes to Superannuation. February 2015

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1 SME Employer Attitudes to Superannuation February

2 Executive Summary & Strategic Insights UMR interviewed 550 employers and key decision makers from a representative range of industries across the country from the 28 th November to the 15 th of December The research provides evidence that banks are already actively promoting their house brand super funds to their SME employer customers. It s clear that certain banks are more active than others. Slightly less than half of those who ve been approached say their bank has offered benefits for them to change. Of those who received offers, discounts on fees within the superannuation (38%) and lower insurance premiums for their business (37%) appear to be the most frequently offered, followed by free financial advice (32%) and discounted interest rates and fees on business banking products (25%). Lower insurance premiums are both desired by employers, and more frequently offered by banks. Discounted interest rates and fees on banking products have strong appeal but are less frequently offered. Fee discounts on superannuation products themselves are a little less desired, but frequently offered. Given many employees still tend to go with default funds rather than actively choosing their own funds, such activity could potentially affect superannuation outcomes for many Australians. While a minority of employers overall, a substantial proportion (33%) of employers who say they have been made offers by their bank admit they have changed their default funds as a result. Many more (57%) say they are still considering switching. Less than a quarter of businesses say they are covered by an award or workplace agreement that specifies what default super funds they can choose from. 2

3 Main Findings

4 Some evidence of banks cross-promoting super funds Has your main bank recommended or offered a superannuation fund to you as your businesses default fund? % Yes % No % Unsure 63% 11% 26% 4

5 Two major banks are more active than others Has your main bank recommended or offered a superannuation fund to you as your businesses default fund? OF THOSE WHO SAID YES: Proportion who say they were recommend that bank s owned fund A 40% A 46% B 27% B 20% C 24% C 57% D 24% D 15% 5

6 s appear to be offering incentives Did your bank offer any benefits for you to change your default super fund? 57% 43% What benefits did your bank offer? Some discounts on fees within the superannuation Lower insurance premiums for your business Free financial advice for your employees 38% 37% 32% Discounted interest rates or fees on your business 25% Free financial advice for your business 24% % Yes % No Base: Those whose bank has recommended a fund Free or discounted IT products for your business (like an ipad or business software solutions) 22% Free tickets to sporting events or corporate hospitality 22% 6

7 Most frequent deals offered by major banks* Did your bank offer any benefits for you to change your default super fund? A B C D Most common offer Lower insurance premiums for your business Free or discounted IT products for your business Discounted interest rates or fees on your business accounts Free tickets to sporting events or corporate hospitality Free financial advice for employees Second most common offer Lower insurance premiums for your business Free financial advice for employees Third common offer Free financial advice for your business Lower insurance premiums for your business Some discounts on fees within Super products Free financial advice for employees Lower insurance premiums for your business Base: Those who say they were offered benefits to switch default funds *Very small samples, indicative only 7

8 Offers and incentives can influence employer decisions How important would each of the following benefits be in deciding whether to change your default super fund? Extremely important Very important TOTAL 1. Lower insurance premiums for your business 22% 32% 55% 2. Discounted interest rates or fees on your business accounts (like loans, overdrafts or credit cards) 21% 30% 51% 3. Some discounts on fees within the superannuation product 17% 31% 48% 4. Free financial advice for your business 18% 27% 45% 5. Free financial advice for your employees 16% 26% 42% 6. Free or discounted IT products for your business (like an ipad or business software solutions) 11% 25% 35% 7. Free tickets to sporting events or corporate hospitality 9% 15% 24% 8

9 Among those who ve been made offers, many have switched their default fund or are considering doing so Did you change your business's default super fund after these benefits were offered? % Yes % No, but I m still considering it % No, and I m not going to 57% 10% 33% Base: Those who say they were offered benefits to switch default funds 9

10 Industry breakdown Most employers say they re not restricted in their choice of funds Is your business covered by an award or workplace agreement (e.g. an EBA) which specifies what default super funds you can choose from? TOTAL Unsure Administrative and Support Accommodation and Food 31% 29% 14% Manufacturing Retail Trade 27% 24% 22% Construction Health Care and Social 22% 21% 64% Professional, Scientific and Technical 19% Wholesale Trade 17% No *Small samples, indicative only Yes Education and Training Financial and Insurance 15% 13% % Yes 10

11 Methodology

12 Methodology n=550 interviews; nationwide; interviewed online Business owners with at least one employee, with quotas in place for geography & business size. Fieldwork: 28 th November 15 th December 2014 Data is weighted according to geography, business size and industry so the sample matches ABS census data to ensure a representative sample Online panel members are primarily recruited offline and by invitation only 12

13 About UMR UMR is a public opinion consultancy that helps Australasia s and Asia s Corporate and Political Leaders make strategic decisions about their organizations and the issues of the day, based on cutting edge research techniques. UMR specialises in designing strategic research for clients that operate in highly competitive, often challenging environments. Our focus is on the social and political factors which impact corporate and organizational reputation. 13

14 For further information about this research please contact the lead researcher: Dr Campbell White CEO (Australia)