Industry Super vs Retail Super (2026) — What's the Difference and Which Is Better?
This article provides general information only and does not constitute financial advice. For advice tailored to your situation, consult a licensed financial adviser. Learn more.
Contents
The two main types of Australian super funds are industry funds and retail funds. Understanding the differences helps you evaluate whether your current fund is right for you — or whether switching makes sense.
What Is an Industry Super Fund?
Industry funds are profit-to-member funds originally established for specific industries or sectors. Surpluses are reinvested in the fund for members’ benefit — there are no external shareholders receiving dividends.
Examples: AustralianSuper, Hostplus, Cbus, HESTA, Aware Super, Australian Retirement Trust, UniSuper, REST
What Is a Retail Super Fund?
Retail funds are for-profit funds run by financial services companies. Profits go to shareholders (e.g., the parent bank or insurance company). They are generally sold through financial advisers and employer arrangements.
Examples: Colonial First State (FirstChoice), MLC, AMP Super, BT Super, Mercer Super
Key Differences
| Feature | Industry Funds | Retail Funds |
|---|---|---|
| Ownership | Profit-to-member (no shareholders) | For-profit (shareholder owned) |
| Typical fees | Lower — 0.5–1.0% total | Higher — often 1.0–2.5% total |
| Investment options | Limited to moderate (20–40 options) | Very broad (hundreds of options, managed funds) |
| Default performance | Strong — median industry fund consistently outperforms median retail | Below industry median on average |
| Insurance | Good default cover; some funds offer own-occupation TPD | Variable; some retail funds offer higher cover amounts |
| Adviser access | Limited in-house advice | Often bundled with financial adviser access |
| Accessibility | Online-first; direct member management | Often through broker or adviser |
Performance Comparison — The Data
APRA Annual Superannuation Performance Test and SuperRatings data consistently shows that the median industry fund has outperformed the median retail fund over 5, 10, and 15-year periods.
The 2023 APRA performance test found that:
- 96 options failed the test
- The majority of failures were in retail and legacy products
- All 10-year underperformance products that failed were retail or corporate funds
However, “industry” vs “retail” is a generalisation:
- Some retail funds and retail options perform competitively (especially low-cost index options)
- Some industry funds have also failed the performance test in specific options
- Individual options within each fund type vary more than the averages suggest
Past performance is not a reliable indicator of future performance.
Fees — The Most Important Difference
The fee gap between industry and retail funds is often the deciding factor for most members. On a $100,000 balance:
| Annual Fee Rate | Fee Cost | Balance Lost Over 30 Years (vs 0.5% baseline) |
|---|---|---|
| 0.5% (low-fee industry) | $500/year | — |
| 1.0% (mid-range retail) | $1,000/year | ~$100,000 |
| 1.5% (higher retail) | $1,500/year | ~$200,000+ |
Even a 0.5% fee difference compounds to a very large balance difference over a working lifetime. For most members with no specific need for an adviser or exotic investment options, lower fees directly translate to higher retirement balances.
When Might a Retail Fund Make Sense?
Retail funds can be appropriate when:
- Broad investment choice is needed — retail funds often offer hundreds of managed fund options, direct shares, and ETFs not available in industry funds
- Self-Managed Super Fund (SMSF) structure — some retail master trusts allow similar control to an SMSF with lower setup costs
- Specific insurance needs — some retail funds offer tailored or higher insurance cover amounts not available in industry defaults
- Adviser relationship — where ongoing financial advice is integrated with super management
For most ordinary workers in the accumulation phase, the fee advantage of industry funds is substantial enough that the broader investment menu of retail funds rarely justifies the additional cost.
What About MySuper?
All funds must offer a low-cost, simple MySuper product as a default for employer contributions. MySuper products are subject to APRA performance testing — underperforming products must notify members and can be shut down.
Both industry and retail funds offer MySuper products. The performance test has disproportionately affected retail MySuper products.
Frequently Asked Questions
Can I switch from a retail super fund to an industry fund easily? Yes — super choice allows all employees to nominate their own fund. You can complete a rollover from your retail fund to an industry fund via myGov → ATO → Super → Transfer super, or by contacting your new fund. The most important thing to check before switching is your insurance: rolling your balance out of a retail fund typically cancels insurance in that fund, and your new fund’s insurance may have different waiting periods, benefit definitions, or lower default cover. See How to Switch Super Funds.
Why do retail super funds still exist if industry funds consistently outperform them? Retail funds provide genuine value in certain scenarios: broad investment menus (including direct shares, hundreds of managed funds, and separately managed accounts), integrated financial planning relationships, and corporate plan arrangements. Some high-balance members, self-directed investors, and those with complex estate planning needs find retail platforms useful despite higher fees. The challenge is that many ordinary members end up in retail funds by default (employer choice or adviser recommendation) rather than by conscious active selection.
Are all industry funds good and all retail funds bad? No — “industry” and “retail” describe ownership structure, not quality. Some industry funds have failed the APRA performance test. Some retail options (particularly low-cost index options within retail platforms) have competitive fees. The generalisation holds at the median level — the median industry fund has outperformed the median retail fund over 10 years — but individual fund performance varies significantly. Always compare specific products, not just categories.
What does “profit-to-member” actually mean in practice? A profit-to-member fund has no external shareholders. All revenue (fees collected from members) goes toward: (1) running the fund (administration, investment management, insurance, advice, regulatory compliance), and (2) whatever remains is reinvested for members’ benefit (e.g., fee reductions, service improvements). There is no dividend paid to an outside shareholder. By contrast, a retail fund’s owner can extract a profit margin from the fee pool. The magnitude of this difference in practice depends on each fund’s specific cost structure and efficiency.
My employer uses a retail fund as its default. Do I have to use it? No — all employees (with limited exceptions) have the right to choose their own super fund using the ATO’s Standard Choice of Fund form. Your employer must pay SG contributions to any complying super fund you nominate. If you choose not to nominate, your employer will pay to their default fund. You should consider comparing the employer’s default against industry fund alternatives before accepting the default.
Is it true that industry funds own infrastructure and property directly? Many large industry funds have significant allocations to unlisted assets — infrastructure (ports, airports, toll roads, utilities) and property (commercial, industrial) — held directly or through unlisted trusts rather than listed REITs or infrastructure ETFs. This provides diversification and different return characteristics (long-term, inflation-linked, less correlated with share markets) but also introduces illiquidity and periodic valuation rather than daily market pricing. Retail wrap platforms do not typically offer unlisted asset access to ordinary members.
For further reading: Best Super Funds Australia, Super Fund Fees Comparison Australia, How to Choose a Super Fund. For advice tailored to your situation, speak with a licensed financial adviser through MoneySmart.