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The ultimate guide to retail super funds

Retail funds are usually run by banks or investment companies. These types of funds are open to the general public.

Alison Banney
Alison Banney

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There are two types of retail superannuation funds. Retail funds are known as “for-profit” funds and the master trust option is the most common type of fund. Retail funds are often owned by the big 4 banks, see below for an example:

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Compare retail super funds in Australia

Name Product Past Performance - 1 Year Past Performance - 3 Years Performance - 5 Years Calculated fees p.a. on $50,000 balance
Virgin Money Super - Lifestage Tracker
Virgin Money Super - Lifestage Tracker
-0.86%
6.46%
$358
Virgin Money Super's Lifestage Tracker invests in a range of different assets in line with your age, reducing your risk as you get older, and has some of the lowest fees in the market.
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Spaceship GrowthX
Spaceship GrowthX
11.93%
14.45%
$536
This is a high-risk investment option that aims to deliver high returns over the long term.
Spaceship's Growth X fund invests heavily in Australian and international shares, with a focus on technology stocks. Performance figures and fees supplied by Spaceship, not Chant West.
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Superestate Balanced Essentials
Superestate Balanced Essentials
New Fund
New Fund
$291.50
Superestate invests your super in a range of assets, with a focus on physical residential properties in Australia. The Balanced Essentials fund charges some of the lowest annual fees in the market.
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BT Super for Life - MySuper Lifestage Fund
BT Super for Life - MySuper Lifestage Fund
-2.49%
5.27%
5.53%
$578
The BT MySuper Lifestage fund is a retail fund that invests your super in a mix of asset classes depending on how old you are. Westpac Group customers can manage their super alongside their day-to-day bank accounts.
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MLC MySuper Growth Portfolio
MLC MySuper Growth Portfolio
-1.54%
N/A
$723
The Growth option is a diversified portfolio that aims for high growth over the medium to long term.
MLC is a large retail fund open to all Australians. MLC is the wealth management arm of National Australia Bank.
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The information in the table is based on data provided by Chant West Pty Ltd (AFSL 255320) which is itself supplied by third parties. While such information is believed to be accurate, Chant West does not accept responsibility for any inaccuracy in such information. Chant West’s Financial Services Guide is available at https://www.chantwest.com.au/financial-services-guide . Finder offers no guarantees or warranties about the data and we recommend that users make their own enquiries before relying on this information. Performance, fees and insurance data is based on each fund's default MySuper product. Where the performance, fees and insurance data for the MySuper fund vary according to the member's age, results for individuals between 40-49 years of age have been shown. Past performance is not a reliable indicator of future performance.

*Past performance data is for the period ending June 2020.

What are the features of a retail fund?

  • Retail super funds are open to everyone
  • They have a wide range of investment portfolios available
  • They may be recommended by financial planners, so it's important to check if your financial planner paid any fees or commission if you sign up.
  • They are usually accumulation funds, not defined benefit funds. In other words, your super balance depends on the contributions you and your employer make to the fund. In a defined benefit fund, your pension or final super benefit is determined using a predetermined calculation, looking at factors such as your average salary or salary in the final few years before retirement, plus your age and your years of service.
  • They often charge mid to high fees, but now some are offering the no-frills option, MySuper
  • Companies may want to retain some of the profits, which could mean lower returns for you
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What are the pros and cons of retail funds?

Pros:

  • Lots of investment options.
  • Reasonable results, especially over the past 12 months.
  • Some good advice provided by a large section of advisers.

Cons:

  • More so leading down the line of tied advice.
  • Self-managing can be less expensive for amounts over $200,000.
  • Dependent on the skill and experience of the adviser.

Outcome: Retail funds can be beneficial to clients looking for advice and funds management.

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How do I compare retail super funds?

Here the features to compare:

  • Historical performance. Look at long term returns that span about five to 10 years. It's better to look at the long term yields as super is a long term investment.
  • Aim for low fees. If you have lower fees, the less your balance will reduce every year. However, you may find that funds with large fees are the highest performing funds.
  • Investment options. You will get more value out of your fund if you get a matched investment portfolio.
  • Insurance. Insurance is generally cheaper if you get it within insurance, but it's best to check if it adequately covers your needs.
  • Customer service. Do you prefer checking your fund online or would you prefer using the phone to speak to a real person? These are factors to take into consideration.
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How do I apply for a retail fund?

First things first. Make sure you know why you want to change to a retail fund or open a retail fund. There are many reasons why you may want to change funds:

  • Is it to consolidate your super all into one account?
  • Is to reduce the amount of fees being charged?
  • Do you want a better funds with more features?
  • Do you want a better long term return?
  • Do you want to leave a corporate fund because you've resigned from your job?

Once you go through these checks, you can then apply online to either open or switch to a retail super fund.

Compare different types of super funds

While a retail super fund might have some beneficial features, you may want to consider all the different super fund options before committing to one. Compare the different types of super funds available in Australia below to determine whether a retail super fund is the best option for your superannuation needs.

Super fund typeDescription
MySuperUnder Australian law, most employers are required to offer a MySuper-type fund as a default option for people who cannot (or don’t wish to) select their own fund. These are generally found as defaults, but you may also nominate a MySuper fund. It’s designed to be a safe option for most Australians, and is characterised by:
  • Low fees
  • Opt-out life insurance
  • Straightforward investment options
  • All-around simplicity
Retail fundsWidely-available commercial products, operated by financial institutions to turn a profit for themselves and their customers. These will typically be nominated, rather than selected as a default.
Retail funds can vary widely, but are often characterised by:
  • Offers of competitive returns
  • A wide range of options
  • May be integrated with other financial products
  • May give customers more in-depth control of investments
  • Are often owned by banks
Industry fundsThese superannuation funds are generally designed for workers in a specific industry, and may be especially beneficial. Some industry funds are restricted to workers in a specific industry, while others are open to everyone.
Industry super funds will often be available as a default, or might be nominated. Sometimes a super fund will be both an industry fund, as well as a MySuper fund. The key difference between these funds and retail funds is that they are owned by members not shareholders.
They can vary widely, but are often characterised by:
  • Lower fees
  • A range of insurance options
  • Differing investment options
  • Varying degrees of simplicity
Corporate fundsThese are super funds a business offers to its employees. They might be exceptionally competitive, such as in the case of defined benefit funds. Naturally these will typically be found as default funds with various advantages and features.
Self-managed super fund (SMSF)The do-it-yourself super fund. You are responsible for investing your superannuation, as well as looking after the tax and legal obligations that go along with it. These are explained in more detail in this guide.

Retail super funds developed by financial institutions and insurance companies. These funds cater for people who are interested in investing and saving for retirement.

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