Industry funds sets super pace

LOWER charges have led to industry super funds providing much greater returns than retail trusts over one, three and five years.

Industry funds sets super pace

LOWER charges and no commission payments to advisers have led to industry super funds providing much greater returns than retail trusts over one, three and five years, according to new research.

Figures compiled by data company Rainmaker Information show that, for every dollar in fees paid by someone in a retail master trust over five years, the fund made $8.90 in profit.

Yet someone in an industry super fund earned $16.80 profit for every dollar in fees - nearly twice as much.

This is the 14th consecutive quarter that has shown industry super funds delivering greater profits to members than retail funds.

"For members investing into the default option of a workplace super fund, the typical industry super fund delivered higher profits to their members of $1545 over one year, $3637 over three years, and $6750 over five years when compared with retail funds,'' a spokesman for the Industry Super Network said.

Jeff Bresnahan, managing director of super specialists SuperRatings, said industry funds had outperformed their retail counterparts for a number of years, and consumers should check with their employer to see whether their default option was an industry fund or a retail fund.

"Most people are in industry funds already, but retail funds are generally sold by financial advisers and by some of Australia's biggest companies, who have been able to negotiate preferential terms,'' Mr Bresnahan said.

Historically, he added, financial planners had not recommended industry funds because of the lack of commission, but this situation was slowly changing.

"More advisers charging fees for their advice means that the commission is irrelevant, so that's helping,'' he said.

"Consumers should always check performance figures and fees for themselves to make sure they're getting the best possible deal.''