Why Australians Are Leaving Industry Super Funds and Taking Back Control of Their Retirement

What the big funds don’t make obvious, and what to do about it.

For years, Australians have trusted large superannuation funds to manage their retirement savings. But increasingly, many are asking, “Is this really working for me?”

If you’ve ever felt disengaged, frustrated, or unsure about how your super is being managed, you’re not alone, and you’re not imagining it.

The Question Most People Aren’t Asking

Most large super funds promote the idea that “all profits go back to members.”

On the surface, that sounds reassuring, but here’s the part most people don’t think about: how are those funds actually being used before they reach your member account?

Research into APRA-regulated funds shows a clear relationship between marketing spend and new member growth. In plain English, industry super funds spend money on advertising to attract new members.

That includes:

• Advertising campaigns, including “Compare the Pair”
• Sponsorships
• Brand positioning

These costs are incurred at the fund level and ultimately reduce the profit available to members.

A Different Way to Think About It

Ask yourself: Is my super fund primarily focused on growing my retirement, or growing itself?

SMSFs exist purely to manage the members’ own wealth. There is no marketing budget, no member acquisition strategy, no brand spend.

Just your fund. Your balance. Your strategy.

The Shift Away From “Set and Forget” Super

Australia is entering a major transition phase, with more people approaching retirement and paying closer attention to their financial future.

At the same time, SMSFs are growing steadily, already representing around 1.15 million members and 11% of the market.

Australians are moving from passive participation to active ownership.

It’s Not Just About Returns

Trust and overall satisfaction are stronger drivers of member retention than returns alone.

So the real questions become:

• Do you trust your fund?
• Do you understand what it’s doing?
• Do you feel in control?

The Real Cost of Percentage-Based Fees

Most large super funds charge fees as a percentage of your balance, so as your super grows, so do your fees. Notwithstanding declared fee structures, large super funds also use other hidden methods to distort members’ earnings. You have to look in their Annual Report for the accounting reserves disclosure, and have an accounting background to understand it.

A Real-World Example

Here’s a comparison based on an actual Sharp Accounting client’s SMSF balance, run through an industry fund’s own fee calculator:

• Balance: $1,787,373
• Annual fees: $12,180 (assuming Balanced Investment Option)

If there was also a spouse with a $500,000 balance and the same investment option, those fees would be $3,812, making a total of $15,992.

How SMSFs Are Different:

• Costs are generally or largely fixed
• Fees don’t automatically increase with your balance

Example:

Sharp Accounting SMSF fee: $4,750 + GST p.a. for the same balance, irrespective of whether it’s a one or two-member SMSF.

Important Context

• Costs vary depending on complexity
• There is a one-off setup fee
• SMSFs may have additional ongoing expenses, such as annual company review and ASIC fees
• APRA funds may be able to obtain discounted member insurance that won’t be available as an SMSF

Percentage-based vs fixed fee structures can create very different outcomes at higher balances.

Why People Are Making the Switch

• Control over investments
• Flexibility and choice
• Tax and estate planning opportunities
• Alignment with long-term goals
• Better access to advice
• Access to better insurance options that are more relevant to members’ needs

But SMSFs Aren’t for Everyone

SMSFs involve compliance obligations, administration and investment responsibility. That’s why getting the right advice is critical. We share more about SMSF myths here.

How Sharp Accounting Can Help

At Sharp Accounting, we work with clients who feel disconnected from their super, are concerned about rising costs, and want clarity before making a change. We have an in-house SMSF specialist with over 20 years of experience.

You get:

• Deep technical expertise
• Practical, real-world guidance
• Ongoing compliance and tax support

We help you:

• Understand your options
• Compare structures
• Implement correctly if appropriate

We also have a Financial Planner in our building who could assist with your decision. Please note they aren’t a part of Sharp’s and may charge their own fee for advice given.

Take the First Step

If you’re questioning your current fund or curious about SMSFs, download our free SMSF Suitability Checklist. And feel free to get in touch with Julian Versloot, our SMSF Specialist.

Important: This article provides general information only and does not take into account your personal financial situation, objectives, or needs. It is not financial advice. You should seek advice from a licensed financial adviser before making any decisions regarding your superannuation.