Growing FUA has prompted regulators to analyse the current state of superannuation, and several regulatory changes have been introduced.
Melbourne, Australia (PRWEB) December 20, 2013
Retail super funds account for the second largest asset base within superannuation, and are becoming a significant element of the Australian financial system. Over the five years through 2013-14, funds under administration (FUA) are forecast to grow at annualised 4.9% to reach $467.6 billion. The Retail Superannuation Funds industry in Australia is underpinned by guaranteed super contributions and a growing labour force. According to IBISWorld industry analyst Andrei Ivanov, “industry revenue continues to be extremely volatile, with investment income causing most of the shocks.” As such, industry revenue is not indicative of industry performance. In 2013-14, revenue is forecast to grow by 3.5% to reach $84.5 billion.
Growing FUA has prompted regulators to analyse the current state of superannuation, and as a result, several regulatory changes have been introduced over the past two years. These reforms are aimed at increasing the efficiency of superannuation (through SuperStream) and improving comparability between super funds (through MySuper). “The immediate effect of these is expected to be a decline in fees charged to the members,” says Ivanov. Self-managed super funds (SMSFs) are becoming an increasing threat to the industry. High net worth clients in retail super funds are opting for more flexibility and control over their retirement savings. As such, some are exiting retail super funds in favour of establishing SMSFs.
As the amount of FUA within retail super funds grows, managers are expected to start looking for new investment opportunities and access to a wider range of asset classes, such as residential property and unlisted infrastructure. This means that retail super funds (along with superannuation in general) will play an increasingly important role in facilitating capital allocation within the Australian financial system as they help to finance new projects. The growth prospects for the Retail Superannuations Funds industry remain strong.
For more information, visit IBISWorld’s Retail Superannuation Funds in Australia industry report page.
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IBISWorld industry Report Key Topics
Firms in this industry primarily provide retirement benefits to the general public on a commercial basis. These firms have to have more than four members.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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