Retail fund members 'risk making big losses'

Friday 05 March 2010

Article by Mozo

People who invest their super savings in retail funds stand to lose $120 billion over the next decade, a report has said.

The Industry Super Network (ISN), which represents the non-profit superannuation sector, has released a study which compares the returns of industry and retail funds, the Australian Associated Press reported.

It calculated that $47 billion had been lost from retail super funds between mid-1996 and June 2009 because of fees and underperformance.

The body said that if such trends continue, Australians who invested their super in retail funds will be $120 billion worse off over the next decade.

"All of those lost savings are not invested and they’re not earning interest – it snowballs," ISN senior economist Sacha Vidler said.

The warning may be of interest to anyone who compares term deposits in search of a better investment option.

Last month, John Kavanagh, a finance writer for the Sydney Morning Herald, said that the current term deposit market is "very fluid, with lots of special offers".

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