POWERED BY MOMENTUM MEDIA
MySuper funds see largest fee decline in almost a decade
New research from Rainmaker Information has revealed significant reductions in superannuation fund fees across all segments.
Rainmaker’s Superannuation Benchmarking Report examined 1,500 super fund fee options across 354 products.
The research house recorded a 2 per cent decline in super fees over the past year to 0.93 per cent per annum. This was the lowest total expense ratio on record.
Despite the reduction, Australian members paid $32 billion in fees to super funds, an increase of 3 per cent.
MySuper, the most competitive segment covering the most members, saw a 0.05 per cent decline to 1.0 per cent over the year to 30 June 2023.
“This is the biggest fall in the MySuper benchmark fee since 2014,” said Pooja Antil, research manager at Rainmaker. “Of the MySuper products, fees are now level for retail and not-for-profit funds.”
Self-managed super funds (SMSFs) have average fees of 0.65 per cent, making it the cheapest segment.
Personal and retirement products are still charging higher fees of 1.16 per cent and 1.07 per cent, respectively.
Overall, approximately $3.5 trillion is being managed by super funds for Australian members, an increase from $3.3 trillion in the previous year.
Rainmaker also observed that total fees paid are rising twice as fast as funds under management (FUM).
Fee revenue rose by 3 per cent, while super FUM increased by just 1.5 per cent.
According to Antil, this discrepancy indicates a potential diseconomies of scale effect, which could see regulatory attention in the near future.
“While fee revenue increased 3 per cent over the past year, this is lower than inflation and the overall pool of funds under management in superannuation has also increased in that time,” Antil said.
“Any reduction to the average fees is a good result for consumers, and we should encourage a healthy and competitive superannuation market that continues to put downward pressure on fees.”
AUTHOR
Jasmine Siljic
Jasmine Siljic is a journalist at Super Review. Prior to joining SR, she also worked across other Momentum Media brands as an intern and cadet journalist. She recently completed a Bachelor of Media and Communications at Macquarie University.
Recommended for you
A ratings firm has placed more prominence on governance in its fund ratings, highlighting that it’s not just about how much money a fund makes today, but whether the people running it are trustworthy, disciplined, and able to deliver for members in the future.
AMP has reached an agreement in principle to settle a landmark class action over fees charged to members of its superannuation funds, with $120 million earmarked for affected members.
Australia’s second-largest super fund is prioritising impact investing with a $2 billion commitment, targeting assets that deliver a combination of financial, social, and environmental outcomes.
The super fund has significantly grown its membership following the inclusion of Zurich’s OneCare Super policyholders.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
76.97 3 y p.a(%)
2
Global X 21Shares Bitcoin ETF
76.46 3 y p.a(%)
3
UBS Solactive Global Pure Gold Miners UCITS ETF Dis USD
51.13 3 y p.a(%)
4
Global X GlobalX FANG+ ETF
45.15 3 y p.a(%)
5
Select Baker steel Gold Institutional
43.78 3 y p.a(%)
