In discussions with financial advisors in Sydney and Melbourne these days, a certain number keeps coming up. Not the performance tables, not the quarterly data, and not the overall outflow amount. One figure: $1 million. At that point, couples seated across from advisors begin to ask more pointed questions about where their super is, what it is doing, and whether a less expensive fund is still the best option. And more and more, they’re coming to the conclusion that the answer is no.
According to CoreData’s analysis of APRA data, investors withdrew a record $4.3 billion on a net basis from industry superannuation funds in 2025. Five years ago, when industry funds were the clear favorites due to their lower costs, superior long-term performance, and the surge in members from retail alternatives following the Royal Commission, that number alone would have seemed nearly unimaginable. The reversal of trust did not occur gradually. It occurred quickly and at a very particular stage of life.
Of course, the money isn’t going away. About $3 billion of it was absorbed by retail funds on a rolling quarterly basis, with the majority of the work being done by the wrap platforms, especially Hub24 and Netwealth. Currently, Netwealth’s super product generates about $8.9 million per day. It is not a trend. It’s a structural reorganization. Additionally, the platforms are expanding so quickly that some industry fund executives have reportedly begun to consider partnership talks with the very businesses that are eroding their member base. This is, at the very least, an awkward admission of the current situation.
For the first time since 2004, AustralianSuper, the biggest fund in the nation in terms of assets, found itself in the peculiar and unheard-of situation of reporting net outflows from member switching. In comparison to the fund’s overall size, the $250 million net departure is not disastrous, but it is significant symbolically. AustralianSuper has served as a model and a test of the not-for-profit model as a whole. Even a small amount of money leaving it makes one wonder what will happen to the money below it on the size ladder.
CoreData’s founder, Andrew Inwood, lays out the issue clearly. The problem isn’t that industry funds perform poorly. The reason for this is that a 62-year-old with a $900,000 balance, a rental property, and a spouse who is getting close to retirement no longer really needs what they do—managing accumulation, keeping expenses low, and operating a comparatively uniform product. That person seeks guidance on the overall situation. Industry funds mostly see only the super slice of it. When someone is trying to figure out how to effectively withdraw money over decades of retirement, the platforms see everything, which is a significant distinction.
It’s possible that the true story here is more about what Australians now anticipate from financial services in general than it is about super funds in particular. After the Hayne Royal Commission, confidence in advisors fell, and around 2024, it quietly started to rebuild. The data indicates that approximately two-thirds of the time, people switched funds when they started returning to advisers. The timing of the outflow acceleration coincides nearly exactly with the trust recovery curve, which can be explained by this remarkable correlation.
One notable exception is UniSuper, which saw net inflows while its competitors were losing ground. The causes are not enigmatic. It has investment returns that have held up, advisers at 40 physical locations across the nation, and a member communication strategy that seems to make people feel less like account numbers. These three factors—advice, returns, and service—are discussed by its CEO, Peter Chun, as if they were self-evident. And perhaps they are. Why more money didn’t develop for them sooner is the more difficult question.
As all of this is happening, it seems like the industry super sector is lagging behind in a discussion that its members began years ago. There was always going to be demographic pressure. After spending decades in accumulation mode, a generation would eventually come to value complexity over cost. Some funds anticipated it and made the appropriate investments. Many didn’t. One departing member at a time, the data now makes this clear and quantifiable in monetary terms.
