Bank-owned and retail superannuation funds charge between 117 per cent and 182 per cent more than not-for-profit funds and still underperform, according to industry funds-backed group, the Australian Institute of Superannuation Trustees (AIST).
Drawing on the findings of research it commissioned from SuperRatings, AIST said the findings shone a light on the long-term underperformance and the higher fee structure of retail Choice products, across nearly all asset classes.
AIST chief executive Eva Scheerlinck said this, in turn, gave rise to a “persistent drag on the retirement savings of thousands of working Australians” and needed more attention from the Productivity Commission and the regulators.
“Due to poor disclosure and the difficulties involved in comparing super products, most members of these poor performing products are probably none the wiser,” she said.
Pointing to the significant disparity in fees between bank, retail and not-for-profit funds, the AIST claimed that using median fees, someone with $50,000 in a bank-owned and retail fund balanced option could be paying $248.50 a year more in fees.
“… and if they had $250,000, it could be $1,056.62 extra each year compared with a profit to member fund,” it said. “Little wonder the net returns from bank-owned and retail super fund returns are generally lower.”