Robin Bowerman, Head of Retail at Vanguard Investments Australia.
Robin Bowerman, Head of Retail at Vanguard Investments Australia.

Tribunal an investor satisfaction index

THE quarterly report of the Superannuation Complaints Tribunal could be interpreted as a form of investor satisfaction index.

It’s straightforward. When share prices are no longer falling, fund members seem to make fewer complaints about their funds’ administration.

Complaints to the tribunal about a fund’s administrative practices include time taken to rollover super savings, pay benefits and – perhaps most significantly – switch between investment options.

And the level of complaints about the accuracy of account balances also can reflect the state of the markets.

In the aftermath to the bear market, complaints to the tribunal regarding fund administration reached a high point.

The tribunal’s report for the December quarter, released on Friday, shows that complaints about fund administration have been falling, at least in percentage terms. These represented 47.8% of all written complaints, down from 50.9% in the previous quarter and from almost 65% in the June quarter.

And complaints about how the distribution of superannuation death benefits are slowly but surely winding their way upwards as a percentage of complaints – representing 35.2% of complaints, up from 33.7% in the previous quarter.

Going back to the June quarter 2007, complaints to the tribunal about the distribution of death benefits by funds greatly outnumbered those concerning fund administration.

It should be emphasised that the quarterly report of the Superannuation Complaints Tribunal is a lagging indicator of investor satisfaction. It takes time before complaints actually reach the tribunal; first, members must make a written complaint to their funds to try to reach a solution.

The tribunal’s reports can serve as a powerful reminder of what could cause difficulties for some members and their families in the future. (See http://www.sct.gov.au/)

There is no doubt, for instance, that members should have at least a broad understanding of how their superannuation death benefits may be distributed in the event of their death.

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Robin Bowerman, Vanguard Investments Australia's Head of Retail, has more than two decades of experience in the finance industry as a writer, commentator and editor.



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