Fund Level Superannuation Data - Expenses and Adviser Costs
New APRA Super Funds Release - Fees and Expenses At The Fund Level
On October 30, 2024, APRA released detailed 'expenditure' tables for their Fund Level Statistics. This information is complex, particularly for comparing individual and fund types, and covers funds with a balance date of June 30, 2023.
We have updated our Expense and Financial Adviser Fees Dashboard 11 and introduced a new Dashboard 12 for PAYEE Marketing expenses data, showing who received marketing payments.
The updated dashboards are NOW AVAILABLE FOR FREE
The data can be filtered in various ways, including by fund types (e.g., industry and retail funds), individual funds, RSE Licensees, and RSE Licensee asset sizes (e.g., those with over $100 billion in assets). Additionally, summaries by fund type are provided with selected filters.
We focused on the most significant findings from this extensive data.
Dashboard 11 - Expenses
1 - Core Expenses - Overview. We have total expenses, expense ratios, and breakdowns per member for Admin, Operations, Marketing, Services, Trustee/Board Costs, and Others. While total expenses for RSEs may seem high, the expense ratio and cost per member may appear low to many. For instance, Industry Funds total nearly $2.9 billion, with an expense ratio of only 0.28% and a cost of $224.60 per member. In contrast, retail funds have slightly over $2 billion in total expenses, with a higher expense ratio of 0.36% and a cost of $348.80 per member.
Scale impacts these numbers — funds with over $100 billion in RSE tend to show lower expenses, with industry funds at 0.24% and retail at 0.36%. The largest funds, AustralianSuper, has a ratio of 0.17%, and Australian Retirement Trust (ART) shows 0.28%. It's anticipated that ART's costs will decrease, as many expenses in this year were likely due to the merger of Sun Super and QSuper.
2 - In / Outsourced Costs and Non-related party
The breakdown of total costs can be complex. Costs are divided into Insourced Provider, Outsourced Related Party, and Outsourced Non-Related Party. For example, ART had total costs of $656.22M: $379.96M was Insourced, $249.32M was Outsourced Related Party, and $26.94 million was Outsourced Non-Related Party. In contrast, AustralianSuper spent most of its $470.05M on Outsourced Non-Related Party, totalling $314.59M. It's unclear what insights can be drawn from this data, but we know ART faced significant costs due to the merger of the two funds.
3 - Marketing costs - The costs associated with marketing have been a key focus over recent times. Industry funds spent the most at $22.58 per member, while retail funds spent $14.77. The distribution of marketing funds can be subjective and is divided into several categories in the APRA data:
Advertising and Marketing: AustralianSuper led with $43.14M, followed by Aware Super with $29.10M. The amount spent on Adverstising / Marketing segment was 65% of the total Marketing spend.
Member Campaigns: AustralianSuper again was the highest spender at $16.91M, with a big gap to Nulis Nominees at $5.10M.
Research and Data: This category saw minimal spending, with United Super at $1.63M and Care Super at $1.2M.
Sponsorship: Host Plus was at $12.43M, followed by ART at $11.00M. There is a significant difference between industry funds and retail funds. Overall, industry funds spent $34.16M on sponsorship, while retail funds spent just $2.58M.
Other: ART spent $11.19M, while Unisuper followed with $9.14M.
PAYEE Marketing Expenses Dashboard 12
This may well be the most interesting data of all. We have placed the data in a separate dashboard as the other dashboard formats don’t suit the data in how it’s been created by APRA.
There are a number of ways to filter the data. We recommend to start with the PAYEE details commencing in the first column (you can also select last column) and leave other columns blank. You will see that it is split into segments (see more below) and this can then be split ‘ filtered’ further by Fund Type, RSE Licenses and individual funds and lastly if the PAYEE is a related party or not.
Some key findings:
QSuper Limited received the most funds at $31,824, 820 - This is a related party of ART. Most of this was split quite evenly across Admin, Advertising and Sponsorship. Only used by ART.
Initiative Media Australia was next at $25,518,977. To the best of my knowledge this is a major international media firm aimed to ‘grow brand and customer flow’. Four major industry funds spent funds here and allocated to Advertising. United Super topping the list at $8,736,620 plus another $334,159 on admin. Host Plus next at $8,131,054
Unisuper Management Limited, related to Unisuper was next at $24,689,154. All money spent by UniSuper and split mostly across Advertising and Admin.
Industry Super Australia Pty Ltd at $22,500,112. The payments were made Money via 12 industry funds. Six of the funds listed Industry Super Australia as a related party. Most of the money spent was allocated under Advertising at $11,699,383 followed by Member Campaigns at $6,507,834. The biggest spender was AustralianSuper at $6,345,662 followed by HESTA at $4,626,738. Host Plus and United Super who both spent the same amount at $3,908,300.
Other interesting line items:
Google received a total of $13,014,638 while Facebook only got $1,113,978
Under sponsorship (non-related party) - Australian Football League picked up $1,800,144 and GC Suns $1,325,167. Quite a few sporting teams did pretty well mostly out of industry funds
When you get down to the very small dollars, the occasional coffee and lunch is booked in mostly as an admin expense
Financial Adviser Costs - Dashboard 11 Expenses
Adviser costs are always a key topic. APRA has provided insights on these costs, detailed below*.
At the fund level, the top four funds for adviser payments all allocated their expenses to external advisers. The Wealth Personal Super and Pension Fund (AMP) had the highest fees at $294.46M, followed by Macquarie Superannuation at $213.45M and HUB 24 at $172.77M.
Colonial First State ranked fifth with $109.09M but spent $150.35M on external advisers. Colonial have confirmed that the total was reduced by $41.29M linked to their remediation program, hence a reduced total expense. This amount is shown as Financial Planners expense
Allocations for Intrafund Advice are low and primarily used at industry funds. ART leads with $17.66M, followed by HESTA at $12.38M. AustralianSuper, as the largest fund, allocated only $4.19M.
In examining industry and public funds together, Aware Super leads the total advice expenses at $44.27M, AustralianSuper follows at $29.84M, and ART is third at $20.05M. For payments to external advisers, AustralianSuper is notable at $17.55M well ahead of ART at $2.39M and Aware Super at $1.05M.
*Payments to planners may include payments in respect of advice fee arrangements that have been agreed between a member and a financial adviser and/ or payments to planners in respect of member initiated usage of advice services offered by the RSE licensee and charged to the member under agreed or activity based advice fees. - Formal APRA note.
Video below highlights the new Expenses dashboards
Video below is the initial video for the Fund Level Superannuation Statistics