The drop in super fees that could save you hundreds
Superannuation fees are down for the first time since 2014, to $32 billion, latest Rainmaker Information research shows.
Australians are now paying an average of 1.1% in super fees, down from the 1.2% they were forking out in 2018. Of this, 0.7% goes towards investment fees and 0.4% to administration fees.
"These reductions show an industry shifting towards a greater commitment to improving super for the members," says head of superannuation at Rainmaker Information, Jason Ross.
On average Aussies pay $2400 each year in super fees. It's more than the average household energy bill, Ross says.
These fees have often been without matching fund performance. More than 170,000 people were put into a poor performing super product in 2017-18 - costing them up to $500,000 in retirement - according to research from Super Consumers Australia.
Rainmaker, publisher of Money magazine, says the most recent fee relief came from retail funds, a result of increased competition in the wake of the banking royal commission.
"After 10 years of regulators failing to make considerable impacts on the super landscape, last year's Productivity Commission and royal commission have already started to prove their effectiveness," says Ross.
In 2015, the average MySuper fund charged 0.24% more than non-profit MySuper funds. That gap is now 0.04%.
AMP funds saw the greatest fall in fees between 2018 and 2019, with its Super Direct for Business Fund shaving just shy of 1% (see table).
The fall in fees comes at a handy time for the super industry, as it faces an upcoming Australian Prudential Regulation Authority (APRA) performance review of fees, investments and sustainability.
The outcomes of this review will also likely benefit super fund member balances in the long term.
ASIC's MoneySmart website suggests checking your annual statement to see what fees you're paying. You can also check your super fund's Product Disclosure Statement (PDS) or contact a financial adviser.