Super too confusing with extra choices

TOO much information is frustrating super fund members and prompting some to believe choice overload is a deliberate strategy to confuse them.

New research by Industry Super Australia has found that more than two-thirds of Australians would prefer fewer than 20 investment options for their super fund, and 58 per cent want less than 10 options, well below the hundreds of choices offered by many major funds.

It found that Millennials and women are the most likely to want less choice, while Baby Boomers are less confused but more cynical – with 67 per cent believing that big bank-owned super funds use detail to confuse people.

“The younger you are, the less choice you actually want,” said Industry Super Australia chief executive David Whiteley.

This could be partly because retirement seemed distant for younger people, he said, but added that most Australians felt confused. “Too much choice creates inertia.

“It’s one thing to find that the public recognises there is too much choice and it hinders their decision-making. It’s another thing for the public to conclude that it’s a deliberate strategy.”

Alex Dunnin, director of research at Rainmaker SelectingSuper, said he would be cautious of labelling choice overload as a tactic to confuse, as choice was common in many industries including energy, telecommunications, new cars and entertainment.

“The finance sector has a habit of creating more and more choices – it’s a bit like Netflix constantly putting more stuff on its platform,” he said.

He said MySuper funds – simpler, cheaper superannuation where employers must put your money if you haven’t chosen a fund – helped address the issue, and big financial institutions were trying to build more basic funds.

People should contact their super fund or check its website if they wanted less choice and simpler super, Mr Dunnin said.