Big 4 Banks Cash In On Super Fees

According to recent research by Rainmaker, Australia’s four big banks collect one third of all fees paid to super funds totalling nearly ten billion dollars.

The study commissioned by Industry Super Australia finds that the superannuation industry draws an estimated $30 billion in fees in 2014/15, with a 33% share of that going to Commonwealth Bank, Westpac, NAB and ANZ collectively. This level of fees is disproportionate to the funds under management.

When it comes to fees, CANSTAR’s recent research of 67 superannuation products, from both industry and retail sectors, has found that it does pay to shop around. The minimum, maximum and average fees across the 67 superannuation products included in its 2015 Star Ratings were as follows:

Super Balance ($) Average Fees ($) Min. Fees ($) Max. Fees ($)
25,000 257 105 732
80,000 826 360 2,285
140,000 1,437 630 3,836
160,000 1,640 720 4,384
500,000 4,906 2,250 13,700
Fees include Administration Fees and Indirect Cost Ratio (including Investment Fee, Performance Fee and other indirect costs). Fees are calculated based on the average super balance specified, based on funds assessed for CANSTAR Superannuation Star Ratings 2015.

“Fees are being generated a number of ways by the vertically-integrated wealth management arms of the banks, including platform superannuation, funds management, financial advice, group insurance and asset consultancy,” said David Whiteley, Chief Executive of Industry Super Australia.

“However these services are carried out within the banks’ conglomerates with very little or no transparency. This should be cause for concern for fund members and an area ripe for disclosure reforms by law makers and regulatory authorities.

“Compulsory superannuation is a foundation of our retirement income system, it should never be a honey pot for the big four banks.”

Retail Super Funds Becoming More Popular

Despite the cost, retail super funds are increasing in popularity. A separate recent survey by Roy Morgan Research found that while industry superannuation funds continue to be ahead of retail funds for satisfaction with financial performance, it’s the narrowest of margins. Industry funds had a satisfaction rating of 59.6% in the six months to August, only just ahead of retail funds with 58.9%.

Significantly, retail funds have a reported higher satisfaction rating among the all-important high net wealth sector ($700,000+), where retail funds score 81.1% compared to 77.6% for industry funds.

You can find out more about the differences between industry and retail super funds here.

Research your options

CANSTAR’s Superannuation Star Ratings report analyses the fees and services offered by 67 public-offer superannuation funds in Australia.

Compare Superannuation Funds

Sponsored products displayed are paid advertisements and Canstar receives a fee for referring you to the advertiser.  Past performance is not necessarily a guide to future performance; unit prices may fall as well as rise. Performance information shown is for the historical periods up to 30/06/2016 and investment options noted in the product information. Performance figures shown reflect net investment performance, i.e. net of investment tax, investment management fees and the maximum applicable ongoing management fees and membership fees. Performance information is provided by Rainmaker Information Pty Ltd ABN 86 095 610 996 AFSL 461816 ( which provides general information on superannuation. Any advice on this page is general and has not taken into account your objectives, financial situation or needs and is not a recommendation for your particular circumstances. Consider whether this advice is right for you. Consider the product disclosure statement before making a purchase decision. You may need financial advice from a qualified adviser.

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