Banks rake in super cash
Wealth funds pocket $12 billion on fees paid by workers
AUSTRALIA’S big banking groups pocketed more than $12 billion of the $31 billion in superannuation fees paid by Australian workers last year, new data shows.
An exclusive report by super fund research body Rainmaker found retail funds, which are usually run by banks or investment companies, controlled one third of the funds pool but received 50 per cent of fees. Rainmaker estimated that Australia’s major banking groups, including the big four banks, Macquarie Group and AMP, received more than $12.3 billion in fees from retirement funds last year.
Commonwealth Bank, ANZ, Westpac Bank and NAB collected $8.7 billion in fees.
Union and employerbacked industry funds, which manage about 42 per cent of the super pool, attracted about 42 per cent of fees.
Self-managed super funds, which control about a third of funds under management, re- ceived about 7 per cent of fees.
The report found that the superannuation industry drew a total of $31 billion in fees from Australian workers in 2016 with more than 90 per cent collected by for-profit wealth management groups.
The Industry Super-commissioned report said there was no relationship between fees and returns. It said bankowned super funds “consistently underperformed” notfor-profit funds by 2 per cent a year over 10 years. “The high share of total superannuation industry fees being paid into the retail segment, and banking groups and AMP in particular, is significant because of the relative gap in investment outcomes delivered to fund members over the longer term in their respective workplace investment options,” the report said.
Industry Super Australia chief executive David Whiteley called for greater trans- parency in the sector, arguing that “compulsory superannuation should not be a honey pot for the banks”.
“This is a compulsory system, research tells us that people overwhelmingly think it should be not-for-profit, but this report indicates a hugely disproportionate amount of fees are going to the major banks,” he said.
“Banks should be disclosing the profits they are generating from compulsory super.”
mpulsory superannuation should not be a honey pot for the banks. DAVID WHITELEY, INDUSTRY SUPER AUSTRALIA