Retail super funds in Australia

Retail super funds give Aussies the chance to have their retirement savings managed by banks and large investment companies. But is this the right choice for you? Let’s explore what they offer and weigh up the pros and cons.

A retail super fund is a for-profit superannuation fund, usually run by a bank or big investment company. Like any for-profit business, retail super funds generate profits for shareholders by offering services and value to their members.

Retail funds often have higher fees than not-for-profit industry funds (the other major category of super fund), but these fees can reflect the access to a broader range of resources afforded by a large financial institution.

And while the higher fees don’t necessarily guarantee higher returns, many retail funds do have a strong track record. Plus with all their resources, retail funds can often offer more premium services like a wider variety of investment options, slick digital tools and financial advisory services. 

Examples of retail super funds include:

• ANZ Smart Choice Super
• AMP Signature Super
• Colonial First State Super (Commonwealth Bank)
• MLC Super (NAB)

As we mentioned, retail super funds are generally managed by large financial institutions like banks or investment companies, and their profits go to shareholders. Since they are part of larger financial groups, they may offer access to more products like insurance or advice.

Industry super funds, on the other hand, operate as not-for-profits, with any surplus reinvested back into the fund to benefit members.They tend to focus purely on super, often with competitive fees and a straightforward approach.

Industry funds got their start serving specific industries or unions, but most are now open to everyone - as are most retail funds.

If you’re wondering which one to choose, it really comes down to what matches your personal needs and financial goals. Both aim to grow your super, but they approach things a little differently.

Retail super funds are often seen as more expensive, and in some cases, that’s accurate. Part of this is because they often offer premium options, which naturally come with higher fees and can push the average up. On top of that, they often provide a wider range of services and tools, which can also drive up costs.

However there is strong evidence they are becoming just as cost-effective as industry funds for the average Aussie. 

And you can thank MySuper for this. MySuper is a relatively new type of low-fee investment option required for funds that want to qualify as the default choice for employers.

A 2023 report from Rainmaker Information shows that the MySuper fees for Industry funds and retail funds are basically the same, at around 1%:

For the growing number of Aussies who find themselves in their employer's default MySuper option, there seems to be little difference in fees between retail and industry funds, on average.

For those in other investment options, it's important to review your fund’s fee structure alongside the returns and services offered. Compare this with other funds to see if it’s working for you.

Your retail fund’s fees might be reasonable and competitive, or they may not be—it all depends on your individual situation and the specific investment option you've chosen.

Let’s take a closer look at both the advantages and drawbacks of retail super funds to give you a clearer picture of what they offer. 

If you’re considering a retail super fund, it’s worth taking the time to understand how the fees, services and investment options align with what you’re looking for. And before making any decisions, take the time to explore your options carefully. If you're unsure, consulting a financial advisor can help clarify things.

Let’s look at the key things to consider when comparing retail super funds:

• Fees. Look closely at fees—both admin and investment fees. These can add up over time, so lower fees often mean more savings for you in the long run.
• Investment options. Each fund has different investment choices. Make sure they match your risk tolerance and financial goals.
• Performance. While past performance doesn’t guarantee future results, it can still give you an idea of how well the fund has been managed.
• Insurance. Check what types of insurance are offered, like life or income protection, and see if they’re reasonably priced and meet your needs.
• Extra services. Some funds offer more, like financial advice or online management tools. Think about whether these services would be useful to you.
• Reputation and service. It’s always good to check how well-regarded a fund is. Reviews or feedback can help you understand the quality of their customer service.

So you’ve compared your options and decided to join a retail super fund. Good news—it’s a pretty straightforward process! Here’s how it usually works:

• Research and choose a fund. Once you’ve found a retail super fund that meets your needs, you’re ready to get started.
• Application process. Head to the fund’s website or give them a call to begin the application. Most funds will have an online form or a paper application for you to complete.
• Provide identification. You’ll need to provide some basic details to meet the Australian Government’s legal requirements—things like your date of birth, contact info, residential address, and your tax file number (TFN).
• Nominate beneficiaries. You can decide who will receive your super if you pass away, usually as part of the application process.
• Roll over existing super. If you’ve got super with another fund, you can consolidate it into your new retail super fund. Many funds can help you with this step.
• Employer details. If you’re working, make sure to give your employer your new super fund details so they can direct their contributions to the right place.

Remember, it’s always a good idea to seek financial advice tailored to your situation before making any big decisions about joining a new fund.

In the end, retail super funds are just one way to manage your super. The best choice depends on what fits your financial goals and preferences. Take the time to explore your options and make the decision that works best for you.

To learn more about the various aspects of super, check our superannuation guides hub for insights into a wide range of superannuation topics.