Superannuation funds that look to scale to reduce fund manager fees may be disappointed, according to FuturePlus chief executive Madeline Dermatossian.
Dermatossian said that although funds have looked to merge to reduce overall fees, fund managers would just be charging a percentage on a larger pool of money.
"I don't think scale is going to reduce fees that much - it's just a bigger pot of money," she said.
Internalising investment operations on the basis of reducing fees could also prove inefficient, she said, as it would inevitably lead to a hybrid model where the internal team was dependent on external fund managers for guidance.
She questioned how many specialist fund managers super funds would need to in-source, saying fees would "sky-rocket" compared to leveraging off an external fund manager.
"I don't think that hybrid model…is going to be any more effective than having it as a totally outsourced function.
"You may need one or two internal analysts for forwarding, rebalancing, reviewing and those sorts of administrative tasks - but unless you're prepared to in-source the entire funds management function, I don't think that that's essentially going to lead to cost savings," she said.
The research house has offered a silver lining after super fund returns saw the end of a five-month streak last month.
A survey of almost 6,000 fund members has identified weakening retirement confidence, particularly among those under 55 years of age, signalling an opportunity for super funds to better engage with members on their retirement journey.
The funds have confirmed the signing of a successor fund transfer deed, moving closer to creating a new $29 billion entity.
A number of measures, including super on Paid Parental Leave, funding to recover unpaid super, and frameworks to encourage investment in the energy transition, have been welcomed by the superannuation industry.
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