Almost $11 billion flowed out of scandal-plagued retail superannuation funds into industry funds in 2018, with AustralianSuper the biggest winner and AMP the biggest loser.
Australian Prudential Regulation Authority figures published on Tuesday show $3.5 billion exited retail funds in 2017 but that figure tripled to $10.9 billion in 2018.
They are the first official figures demonstrating the full-year effect of the banking royal commission on asset flows in the $2.7 trillion super system.
Australian Prudential Regulation Authority figures published on Tuesday show $3.5 billion exited retail funds in 2017 but that figure tripled to $10.9 billion in 2018. Dominic Lorrimer
Commissioner Kenneth Hayne found retail funds to be riddled with problems but identified few failings by industry funds.
Super savers are voting with their feet which, combined with stand-out investment returns, has accelerated industry fund growth. With that comes greater influence over companies, markets and the economy.
Analysis by consulting firm NMG shows the biggest market mover in 2018 was AustralianSuper, which grew 17 per cent to reach $140 billion in funds under management.
AustralianSuper has the largest share of the market at 5.7 per cent.
"The recent ascendance is driven by a few things, including the fact that AustralianSuper is clearly one of, if not the, leading brand in superannuation, meaning it is the natural destination for individuals thinking of switching their super fund," said Oliver Hesketh, who leads NMG's wealth management consulting section.
AMP is the next-largest fund at $123 billion but its market share has dropped below 5 per cent for the first time since the company acquired insurance business AXA in 2011.
Nevertheless, AMP is still the largest retail super provider, sitting comfortably ahead of its retail competitors in Colonial First State, which is owned by the Commonwealth Bank, NAB-owned MLC and BT, which sits within Westpac. The banks each have about 4 per cent of market share.
AMP last week announced a worse-than-expected $28 million full-year profit, noting that customers had pulled $4 billion from the wealth management division in 2018.
"Each of the biggest five retail funds is in net outflow and losing market share," Mr Hesketh said.
"In contrast, each of the biggest five not-for-profit funds is in a meaningfully positive [funds flow] position and together have added 1.1 per cent of market share in the last year alone."
The APRA figures show large fluctuations in how much money flows into and out of different types of funds over time.
But the trend over the past year has clearly been for bigger outpourings from the retail sector, including $7 billion in the second half of 2018.
The biggest quarterly disruption was in September, when rollovers to industry funds reached $4 billion and transfers out of retail funds were at $3.7 billion.
The commission's hearings on super were held in August, although financial advice hearings in April were also largely related to super, including testimony about the fee for no service scandal.
It is a combination of member switching and excellent investment returns that has racheted up the growth of industry funds to the extent that they will soon overtake self-managed super as the biggest segment of the market.
The industry lobby has already declared victory in a long-running war over super with the big four banks, which are mostly shedding their wealth businesses.
Last September, Industry Super Australia chief executive Bernie Dean claimed that one in five retail fund members was looking to switch to an industry fund following the Hayne royal commission.
In the June quarter of 2018, industry funds' asset holdings for the first time exceeded retail funds – $632 billion to $622 billion.
By December 2018, the figures were $629.6 billion and $589 billion respectively.
The Australian Financial Review previously reported that more than $5 billion had flowed out of super funds owned by AMP and the big four banksinto AustralianSuper, Hostplus and Cbus in the six months to September.
The figure was based on information provided by the funds.
An AMP spokeswoman said outflows in 2018 reflect a range of factors, including more than $2.4 billion in pension payments to customers.
"AMP has a competitive offering across its superannuation and platform businesses, and will continue to rationalise and improve products to ensure we compete strongly in the market," she said.
"Last year, AMP reduced fees by an average of 25 per cent for its MySuper products."
By Joanna Mather
26 February 2019