There is still a need for consolidation to occur within the Australian superannuation industry, according to new analysis released by KPMG.
KPMG’s Super Insights Dashboard and Report, released today, has found that while large funds are getting larger, there are still too many smaller funds which need to consider their futures.
The KPMG research also suggests that, in terms of market share, industry funds have caught up with retail funds over the past decade, noting that in the last decade a migration of market share from retail to industry funds with corresponding increase in assets under management (AUM) by industry funds had occurred.
It said that from 2004 to 2016, retail funds declined in market share from 43 per cent to 29 per cent, with the market composition now virtually one third retail, one third industry/public sector and one-third SMSF.
Commenting on the findings, KPMG head of wealth advisory, Paul Howes said industry funds were no longer the challenger.
“They are now the incumbents,” he said.
“Judged by both AUM and the number of accounts held by funds they are the equals of the retail funds, whose cash flows are relatively weaker and whose lead in number of members is falling.
“At a macro level, the sector is effectively reshaping from its traditional divide between retail, industry and corporate funds to a converging grouping based on the level of AUM and complexity of operating model and offerings.”
The other findings of the KPMG research included:
BlackRock boss Larry Fink praised Australia’s superannuation system in his annual chairman’s letter.
The prudential regulator has announced it will publish new expenditure data of superannuation funds, providing details on expenses like advice, director remuneration, and payments to unions.
Affirming the UK’s growing attractiveness as an investment destination, a number of Australia’s largest investors recently joined the UK Foreign Secretary for an exclusive briefing in Canberra to discuss further opportunities for trade and growth.
The specialist superannuation law advisory practice is set to wind up, with managing partner Jonathan Steffanoni planning to bring a new offering to market.
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