Funds say MySuper the death of medium-sized funds

The new industry super landscape will be one of large mega-funds and smaller specialist ones, according to respondents from a Buchan Consulting thought leadership series. 

Super fund respondents saw the most likely outcome of current legislation as increasing consolidation in the industry.  

There would be no room for medium-sized funds in the new industry super environment, with one respondent saying mid-tier funds would spend the next five years looking for merger partners. 

The majority said corporate funds would continue to be pressured, particularly as modern awards under Fair Work Australia rolled out. 

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Respondents did not see the legislation as a threat to member retention. However, funds were bolstering retention programs in response to growth in the self-managed super sector and the rise of the big four banks in superannuation. 

Some funds felt they had lessened the self-managed threat by offering similar investment options within the fund, and believed the sector's growth would start to plateau. 

Most respondents, and particularly industry fund executives, highlighted the big four as principle threats.

They said as data became more streamlined, banks were seen as natural aggregators across most areas of consumer finance and had more funds to invest in marketing and cross-subsidisation.