POWERED BY MOMENTUM MEDIA
Number of superannuation funds to halve by 2016, says ASFA
The consolidation in the superannuation industry could see the number of APRA-regulated funds shrink by almost 50 per cent in the next five years, according to Association of Superannuation Funds of Australia chief executive Pauline Vamos.
Speaking at the Financial Services Institute of Australia (Finsia) conference this week, Vamos predicted the number of APRA-regulated funds would fall from 286 to 150 by 2016.
"We will have significant funds - and I suspect AustralianSuper will still be the largest - but we'll still have a lot of small, excellent boutiques," Vamos said.
The forced account consolidation within MySuper would also drive a significant reduction in the number of member accounts, which currently stands at about two-and-a-half per member, she said.
The ageing population will see a change to asset allocations, Vamos added.
"At the moment, fixed interest is about 10 per cent - I think that will nudge 20 per cent, particularly if we get the corporate bond market opening. Infrastructure is at about 5 per cent, and I think it could move to 10 per cent," she said.
She also predicted a decrease in the number of self-managed superannuation funds, and an increase in the superannuation pool from $2 trillion in the next five years.
One major risk for the industry was the increased leakage of money from the system, Vamos said - with the loss of contractors and self-employed Australians from the system a major concern.
A single proof of identity (through the Government's planned use of Tax File Numbers for identification) would allow people to move around the industry more freely and would contribute to competition, Vamos said. As a result, there will be an increase in marketing spending by funds, she added.
The one "game changer" for Vamos was advice, which she said funds could use to capture and retain members.
"The average fund will provide advice. They will need their own advisers. I think the integration of those professions into the superannuation industry will be an enormous opportunity," she said.
Recommended for you
Vanguard Super has reported strong returns across most of its investment options, attributed to a “low-cost, index-based approach”.
The fund has achieved double-digit returns amid market volatility, reinforcing the value of long-term investment strategies for its members.
Australian super funds notched a third consecutive year of strong returns, with the median balanced option delivering an estimated 10.1 per cent over the 2024-25 financial year, but an economist has warned that the rally may be harder to sustain as key risks gather pace.
AustralianSuper has reported a 9.52 per cent return for its Balanced super option for the 2024–25 financial year, as markets delivered another year of strong performance despite the complex investing environment.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom 465 Calder Road Calder
99.46 3 y p.a(%)
2
DomaCom DFS Mortgage
95.46 3 y p.a(%)
3
Global X 21Shares Bitcoin ETF
78.55 3 y p.a(%)
4
BetaShares Crypto Innovators ETF
50.39 3 y p.a(%)
5
Global X GlobalX FANG+ ETF
47.50 3 y p.a(%)
