Why Retail Funds Exist (and Who Owns Them)

Retail super funds exist because Australia has long relied on the private sector to deliver retirement products alongside government and not-for-profit funds. When compulsory superannuation was introduced in the early 1990s, banks, wealth managers, and investment houses recognised an opportunity: millions of Australians would need somewhere to direct their contributions, and many would want advice, investment choice, and additional financial services. Retail funds emerged to fill that gap – as commercial businesses offering superannuation as part of a broader financial ecosystem.

At their core, retail funds are for-profit enterprises. They are owned by the institutions that create them: large banks, global asset managers, insurance companies, and public companies listed on the ASX. Unlike industry or public sector funds, they do not operate under a member-owned structure. Instead, they operate like any other financial service provider – generating revenue through investment fees, administration charges, and sometimes advice fees. That revenue becomes profit for shareholders.

Their existence is partly structural. Australia’s financial system has always blended public regulation with private delivery. Just as banks run mortgages and insurers run life policies, private institutions were always positioned to run superannuation products. Retail funds offered features the early industry funds didn’t:

• Tailored advice
• Wrap accounts that provide a single platform to manage super and other investments.
• Investment menus that ranged from global equities and property trusts to thematic strategies and ESG options.

For a segment of the population – particularly higher-income earners, people with advisers, or those seeking more control – these offerings provided value beyond the defaults.

Retail funds also play a role in competition. Because they operate in a fully commercial market, they innovate quickly. They launch new investment options, partner with global managers, build sophisticated digital platforms, and compete aggressively for members. In theory, this competition pushes the entire system to improve performance, reduce fees, and modernise – even if, in practice, not all retail funds have historically delivered strong net returns.

Over time, the ownership landscape has shifted. Banks once dominated the retail super sector, but many exited after the Hayne Royal Commission, selling their superannuation arms to independent wealth managers. Today, retail funds are typically owned by specialist investment companies, global asset managers, or ASX-listed financial groups. Despite these changes, the basic structure remains the same: members invest; institutions manage; shareholders benefit from the profits.

Retail funds exist because millions of Australians want choice, advice, and customisation – and because Australia’s retirement system was designed to allow both member-owned and shareholder-owned providers to compete side by side. In a landscape built on diversity and individual preference, retail funds occupy the space for people who value optionality and professional guidance, even if it comes at a higher fee.