Latest APRA figures reveal industry super funds are still the best

The performance gap between industry and retail superannuation funds is widening.

Industry super funds still the best

Official figures released this week reveal the performance gap between industry and retail superannuation funds is widening.

The Australian Prudential Regulation Authority (APRA) released its Quarterly Superannuation Performance publication this week, and the results show industry super funds continue to outperform retail funds by a considerable margin.

In the past financial year, industry funds delivered an average return of 10.7 per cent, compared to 7.8 per cent for super funds, a gap in performance of 2.9 per cent.

The three-year average shows industry funds returning 8.1 per cent annually, compared to 5.7 per cent from retail funds, a gap in performance of 2.4 per cent.

Industry Super chief executive David Whiteley described the widening performance gap as ‘alarming’.

“It is well known that not-for-profit industry super funds dominate the performance league tables. Less known is the apparent widening performance gap between industry and retail super funds,” he said.

“For those Australians who entrust their savings to a bank-owned super fund, the trend is alarming. 

 “For the average income earner, a two per cent performance gap may be a difference of around $200,000 at retirement. The new figures show the performance gap edging dangerously close to three per cent.

“This is a concern for regulators monitoring the system; governments footing pension bills; and, most importantly, Australians saving for their retirement.”

He noted that retail fund underperformance was the elephant in the room in public policy debates.

“Policy makers serious about strengthening the retirement income system, must look at cross-selling, profit flows and performance within vertically-integrated financial institutions,” Mr Whiteley said.

What do you think? Are you in an industry super fund? If not, will you consider switching after seeing these figures?

RELATED ARTICLES





    COMMENTS

    To make a comment, please register or login
    Sal
    24th Aug 2017
    10:46am
    I'm not sure these comparisons are relevant. It's not comparing like for like. Growth or conservative funds will have a considerable difference. My retail fund returned 13.5% last year with an an average of more than that for the past 5 years.
    MICK
    24th Aug 2017
    10:59am
    And now you know why Turnbull and his cronies want 'professional managers' in....to milk a well performing system.
    If it ain't broken don't fix it (for your mates) Malcolm! It ain't broken!
    Tib
    24th Aug 2017
    8:11pm
    Couldn't agree more Mick. Mal and his greedy mates are dying to get in and steal every dollar.
    johnp
    24th Aug 2017
    12:42pm
    Yes, very interesting and I have suffered going from an Industry super fund to retail one about 4 years ago ! Generally speaking, Industry super funds seem to be a lot more focused on their members than the retail funds who appear to be more focused on sales. Retail funds forget that repeat business and word of mouth is important !!
    floss
    24th Aug 2017
    1:39pm
    I feel more at ease with a industry fund and have compared the two and find a industry fund perform better and carry a lower fee.I can understand why the big end of town would like to take over our fund, once again greed. Mick has summed it up fairly well .
    floss
    24th Aug 2017
    2:29pm
    We had a small super fund with a retail fund and always had the feeling they owned the investment not us.
    Tib
    24th Aug 2017
    8:20pm
    Yes I looked at retail funds. No I didn't buy into one. Very high fees especially bank funds. The market does badly you do badly the market does well you do well , but they are always raking your money in they never lose. And they don't even preform well. Some of the fees are beyond belief. They should wear a mask and carry a gun at least we could put them in jail apparently this is legal.


    Join YOURLifeChoices, it’s free

    • Receive our daily enewsletter
    • Enter competitions
    • Comment on articles