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Gross superannuation fees have fallen for the first time in six years,
down to $32 billion.
Super fund members in Australia are now paying 1.1 per cent in fees on
average. This is down from the 1.2 per cent they were paying in 2018.
This is the headline result from the 2019 Rainmaker Information super
fund fee study that analysed fees charged by more than 500 superannuation funds
and 50 self-managed super fund administrators.
Super funds are capitalising on their growth in assets under management,
achieving greater economies of scale and reducing costs for their members.
“Super fund fees are approaching an average of 1 per cent. These
reductions show an industry shifting towards a greater commitment to improving
super for the members,” head of superannuation research at Rainmaker
Information, Jason Ross, said.
“Australia’s 13.5 million super fund members still pay $2400 on
average each year in fees, the equivalent of the average household energy
Of the 1.1 per cent members pay in fees, 0.7 per cent is paid for
investment fees and 0.4 per cent for administration and product related fees,
Members pay different fees depending on their product type:
Workplace funds, those used by employers, charge an average 1.24 per
Personal funds, that members can join as individuals, charge an average
1.49 per cent.
Retirement funds, for members who have retired, charge an average 1.33
Small self-managed super funds (SMSF) charge an average 0.80 per cent.
The fall in gross fees was primarily a result of retail funds lowering
their fees as a competitive reaction to members moving across to lower priced
not-for-profit (NFP) funds.
In 2015 the average retail MySuper product charged 0.24 per cent more
than NFP MySuper products. Today this gap has narrowed to just 0.04 per cent.
“After ten years of the regulators failing to make considerable
impacts on the super landscape, last year’s Productivity Commission and Royal
Commission have already started to prove their effectiveness,” Ross said.