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Do you have the best Superannuation Fund?

As I am not a financial planner, I can’t give you specific advice, but I can talk about the funds in general and you can draw your own conclusions as to what would work best for you.

Let’s take a look at what funds are available to choose from.

There are two main types of funds:

APRA-regulated funds consisting of Industry Funds, Retail Funds, and Corporate Funds (set up by employers for their employees) and Self-Managed Super Funds (SMSFs).

Let’s compare these main types of funds:

Comparison

Feature Industry Super Fund Retail Super Fund SMSF
Regulation APRA APRA ATO

 
Profit structure Not-for-profit For-profit Not applicable

 
Who manages investments Professional fund managers Professional fund managers You (as trustee)

 

 
Investment control Low Medium High

 
Direct property ownership ❌ No ❌ No ✅ Yes

 

 
Fees Generally low Generally higher Fixed + variable
Admin & compliance Handled by fund Handled by fund Trustee responsibility

 
Best for Passive investors Investors wanting choice/advice Hands-on investors

Let’s look at the Pros & Cons of each type of fund in further detail.

  1. Industry Super Funds

What they are:
Industry funds are not-for-profit APRA-regulated super funds. Profits are returned to members rather than shareholders. Examples are: Australian Super, Aware Super, Australian Retirement Trust, Rest, Hesta, Hostplus, Unisuper

Key characteristics

  • Professionally managed, pooled investments
  • Typically lower fees on default (MySuper) options
  • Limited but diversified investment choices
  • Minimal member involvement required

Pros

  • Generally lower fees
  • Strong long-term net returns
  • Simple, low-maintenance option

Cons

  • Limited investment choice
  • No direct control over assets
  • No direct property ownership

Best suited to:
Employees and individuals who want a low-cost, “set and forget” super fund.

 

  1. Retail Super Funds

What they are:
Retail funds are APRA-regulated and run by banks, insurers or investment companies. Examples are: AMP Super, BT Super, MLC Super, Macquarie Super, Netwealth, Hub24, IOOF

Key characteristics

  • Broader range of investment options
  • Often linked to financial advisers
  • Platform-style features available

Pros

  • Wider investment choice
  • Access to financial advice
  • More customisation than industry funds

Cons

  • Generally higher fees
  • More complex fee structures
  • Costs can materially reduce long-term returns

Best suited to:
Members who value investment choice or adviser support and are comfortable paying higher fees.

 

  1. Self-Managed Super Funds (SMSFs)

What they are:
SMSFs are privately run super funds where members are also trustees. They are regulated by the ATO.

Key characteristics

  • Full control over investment decisions
  • Ability to hold direct shares, ETFs, term deposits and property
  • Fixed annual running costs
  • Trustees are legally responsible for compliance

Pros

  • Maximum investment control
  • Direct property investment possible
  • Greater tax and estate planning flexibility
  • High transparency

Cons

  • Ongoing compliance obligations
  • Fixed costs regardless of balance
  • Poor decisions can reduce returns
  • Trustee penalties for breaches
  • lots more paperwork

Best suited to:
Individuals or couples with larger balances, clear strategies, and willingness to be actively involved.

  

Cost comparison (general guidance)

Balance level Industry Fund Retail Fund SMSF
Under $300k  cheapest Often higher         Usually not cost- effective

 
$300k–$500k Competitive Higher   Borderline – depends on strategy
$500k+ Competitive Often expensive   Often cost-effective

 

Which option is right for you?

Industry fund may suit you if:

  • You want low fees and minimal involvement
  • Your balance is modest
  • Your needs are straightforward

Retail fund may suit you if:

  • You want broader investment choice
  • You value integrated advice
  • You accept higher fees for flexibility

SMSF may suit you if:

  • You have a larger balance
  • You want direct investment control (e.g. property)
  • You are comfortable with compliance responsibilities

 

A final word.

If you have a large  balance (or the balance will be large enough in a few years’ time) and have the time and knowledge that you know how to invest – and want the flexibility that comes with the extra paperwork burden – an SMSF can be a suitable option. A recent ASIC review has revealed that two thirds of SMSFs established under the recommendations of a financial advisor are unsuitable to the client’s needs, so be careful even when talking to a financial planner.

If you don’t have the time and want the hassle, stress and bother, and you don’t have an account balance that justifies the decent fee you’ll pay for an SMSF and Retail Fund, an Industry Fund is a good choice.

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