Big banks have eyes set on super sector
Industry Super Australia warns consumers could see a fall in superannuation returns if the big four dominate the sector.
As bank lobbying to secure greater access to the super sector continues, Industry Super Australia (ISA) is warning consumers of a potential loss in superannuation returns should the banks get their way.
Data by the Australian Prudential Regulation Authority (APRA) shows the big four control 80% of assets in the banking sector, up from 66% in 1990.
However, the big four have fewer pieces of the superannuation pie, with super assets roughly split between not-for-profit, retail and bank owned, and self-managed super funds.
As industry super funds have outperformed bank-owned funds by an annual average of 2.26% over the past decade, Industry Super chief executive David Whiteley is concerned that if the banks get a greater share of super assets, it’s consumers who will lose out.
“Desperate to fuel further growth in profits, the banks are lobbying hard to remove the laws that protect workers who don’t choose their own fund and thus save through the default super system,” said Whiteley.
“This would remove consumer safeguards and supercharge cross-selling of bank and super products, and the bundling up of employers’ business banking with workers’ default super”.
“Past returns suggest bank domination of the super sector could leave millions of Australians facing the grim choice of working longer or retiring with less,” he said.
The banks are lobbying for a bigger share of the superannuation market despite recent survey results revealing 70% of Australians believe all super funds should be not-for-profit.
If you’re not happy with your current superannuation, consider switching to an industry super fund which is run to benefit members instead of shareholders.