Super fund fees have fallen to 1.23% but funds have secured a record $18.6 billion in fees over the past year, with the average Australian paying $2,300 in super fees according to a report by super fund researcher Rainmaker.
The researcher has just released its annual superannuation fee report analysing the fees of 526 funds and master trusts as well 60 SMSF administrators with the results confirming that overall superannuation fees measured as a ratio of assets under management have continued to fall, from 1.32% in 2007 to 1.23% in 2013.
Rainmaker has commented that, “members are paying maximum fees at retirement, when their balances are the highest they will ever be, which is why so many are tempted to jump ship and run their own super fund.”
Rainmaker has indicated that the fall is not entirely due to the reduction of funds lowering prices but more indicative of members opting for lower cost superannuation solutions in self managed and not-for-profit super funds or higher balance retail fund members qualifying for fee discounts.
As a result of these shifts, Rainmaker reported a slight economy of scale impact as while in the past five years superannuation funds under management (FUM) has increased 22% estimated annual fee revenue has increased only 15%.
Another significant finding in the report indicated that over a member’s lifetime more than half their total fees will be paid post-retirement.