For the first time since it made its Australian debut in 1992, superannuation is in vogue among the masses.
"I think what we've seen is a real step change in people's attitudes towards super, which is really what we were hoping for," AMP director of savings and retirement Peter Nicholas says.
The change, according to Nicholas, is evident in post June 30 figures that show member contributions running at just over double what they were at the same period in previous years.
"It does look like there has been a step change to use superannuation, and whilst there are still the employer contributions still going in they are making active decisions over and above for money to come into super," he says.
"I think that has a tremendous long impact in the industry and it's certainly what all the pundits have been forecasting. This is going to have a long-term impact and we're starting to see that in member confidence."
Axa wealth management general manager Steve Burgess also found super inflow figures swelled in the run up to the end of June.
"We saw a considerable increase in say over half a million dollars and above, we saw a big increase, something around 300 per cent in a similar period last year," Burgess says.
"We're still getting quite high levels of super contributions, above what you might expect. Quite often then you look at spikes that happen as a result of a deadline, people bring forward things and what you sometimes see is a big spike when you expect it and then things drop off considerably for some months thereafter, well below what you planned to get."
SuperConcepts technical manager Graeme Colley says while there were large quantities of money going into super, the biggest surprise was the amount going into self-managed superannuation funds (SMSF).
"It all came in a late rush, which was even more surprising because I know a lot of the fund managers were expecting to come in earlier and yet it wasn't until really late in June when the money came in," Colley says.
Research from Investment Trends centring on the pre-super deadline found financial planners believed inflows in superannuation would be as a result of the Simpler Super changes and would be likely to stay at an elevated level for a while past June 30.
"Obviously they will come back a little bit from the huge influx of money that we saw in June, but we would expect and are hearing from clients that it remains above where it would normally be at this time of year," Investment Trends principal Mark Johnston says.
While the Federal Government's Simpler Super changes and promise of a million dollar tax-free incentive championed the shift in consumer attitudes, as the months following July 1 float by, the next big question is where will the money go?
For many an accurate prediction seems almost impossible, particularly with recent market volatility. However, in Nicholas' view the money heading out of super is steadily moving into retirement income.
"There are a number of people of the age that they could access retirement income, and they've put their lump in and as quickly as possible moved into what I call the tax-free nirvana for the over 60s," he says.
"Everyone has woken up that super is a very good tax structure but retirement income is an even better tax structure. Money has gone into retirement income because people have retired and the other change we've noticed in the last quarter is just a significant increase in the use of transition-to-retirement allocated pensions."
For Colley it is just too early to ascertain where the money is going to end up, though if nothing else the question has shone a stark light back on the investment world.
"From the investment side I think it will be an interesting 12 months because all the technical hoo-ha has gone out of it these days and now we're thinking about the real things, like where are they going to put this money?" he says.
"When you see 21,000 SMSFs or more than that being set up in the June quarter that issue of where they are going to invest is certainly important, because that's another 21,000 on top of 340,000 that were already there."
According to Johnston, nearly 60 per cent of SMSFs plan to invest in shares in the coming year. While 35 per cent thought high-yielding shares were more appealing, small cap speculative shares regained some interest with about 29 per cent of investors predicting this avenue as the path they will go down.
"However, that was as of May and before the recent market volatility. And we know in volatile markets they tend to gravitate towards more defensive investments within their shares, so usually towards more blue chip and away from more speculative stocks and we would expect that trend to continue in the current environment," Johnston says.
"There's the usual underlying interest in residential property, maybe a little bit more than last year, and just as a general comment, we found that with SMSFs slightly more of them were making use of the cash investments or managed funds than in the past."
However, consumers need not find themselves overexcited by predictions and market trends. Despite past criticism of the regulators that there has been too much cash lying around in super funds, Colley says there is no issue with consumers leaving their super untouched.
"You can leave your money in superannuation for as long as you wish. There may be some people who are quite wealthy that see the million dollar contribution as being a real bonus as they can put into super much more tax effectively than if they were in their own personal investment," he says.
"What they need to do in the future is that they need to talk to their investment adviser to find out a suitable investment strategy for them, because they might be a conservative sort of personality or a growth personality, quite a long time to go until retirement. Other people might not have that long until they retire and draw it down as a pension. But I think one thing that they've got to think about is the timeline and the sort of personality they are and where the money would go to suit that."
So with the movement of money into super and then out, would it be a fair assessment to say consumers are clued up on how to invest?
"With new super funds I think they do," Colley says.
"Because they are getting a lot of information not only from their adviser, if they are using an adviser, but also the ATO [Australian Taxation Office] are also talking to trustees of new superannuation funds about what they need to do with that super fund.
"They're not telling them to invest in shares and property, but they're saying that you need to invest this money, and what are you going to do with the money you put in so far."
FPA chief executive Jo-Anne Bloch agrees.
"I'd say in the last six months as people became more aware of the changes, our members were telling us that they were being inundated," Bloch says.
"There's a combination of super and the baby boomers issue, so baby boomers tend to be more interested in super because they are pre-retirement but then super on the whole became an issue for everyone so there was huge amount of interest and our members were completely overwhelmed with people wanting advice."
Burgess believes consumers are indeed switched on to coping with their super requirements.
"People with reasonable amounts of money have spoken to their advisers well in advance to the end of June. The advisers have really fired them up about how the change to super is a huge benefit," he says.
"They're seeing, despite some recent volatility, fundamentally big increases in the markets. They probably put in as much as they could pre-June and are still convinced of the argument that super remains a key investment strategy for them, especially if they are in their 50s and getting close to 60."
Yet while the general consensus is that investors are savvier about their super, this hasn't stopped a minority of people being caught out by the fine print.
Colley says there have been a number of cases where people have claimed the tax deduction and kept working after age 60 and then they wanted to draw down some money as a lump sum. He says as a result they could face the maximum penalty of 46.5 per cent.
"They shouldn't be touching the money, because it's preserved until they're retired or reached age 65. The penalties on that is that the amount that they drew out on superannuation would be taxed at the maximum tax rate, which is 46.5 pre cent. So it's quite a steep penalty," he says.
"So they need to get some advice on that if that's already happened to work out if it's suitable to draw down a pension from their super fund, or other private resources they can live on until they are able to draw down the money from super. Or maybe the third option is to retire so you can draw down the money to super."
