Two ‘mega funds’ expected to reach $1trn in AUM
AustralianSuper and Australian Retirement Trust (ART) are expected to dominate the superannaution market over the next 10 years, according to KPMG, swelling to $1 trillion each.
In its latest Super Insights report, the firm said, excluding any other mergers, both funds were likely to grow their assets under management from around $200 billion in 2021 to $1 trillion by 2040.
Aware Super was likely to grow to $600 billion while Insignia could grow to $500 billion, both up from less than $200 billion in 2021.
KPMG said: “Under these projections, a small number of large ‘mega funds’ will continue to pull away from the rest of the population. However, in practice, multiple drivers – future consolidations, individual funds’ levels of success in attraction and retention of members, particularly in the retirement space – will impact how the market shifts”.
The level of consolidation was likely to continue for the next few years, particularly as the Australian Prudential Regulation Authority was seeking greater power to force funds to merge. There had been two successor fund transfer (SFTs) announced in 2022.
AUTHOR
Laura Dew
Recommended for you
Financial Services Council chief executive, Blake Briggs, is urging Minister for Financial Services, Stephen Jones, to take advantage of the QAR opportunity to reduce regulatory duplication and ensure advice is affordable.
Former chair of the House of Representatives’ Standing Economics Committee, Tim Wilson, is planning a return to politics after losing his seat in the 2022 federal election.
Morningstar is going to offer research ratings of funds in the $3.5 trillion superannuation sector for the first time in response to demand from financial advisers.
Treasurer Jim Chalmers has opened a consultation into the design of the annual superannuation performance test, canvassing views on a range of reform options.
