The superannuation industry rebounds in 2023

The superannuation industry in Australia saw a significant rebound in 2023, with strong investment returns and global financial market growth driving positive results. According to recent data, the average returns for superannuation funds were 8.62% for the year, with nine funds recording double digit returns. This led to a 7.6% increase in total superannuation assets under management, including Self-Managed Superannuation Funds (SMSFs).

One of the key outcomes of this rebound was the increase in average super balances, which rose from $90,783 to $97,154. Most of the top 10 funds by account balance were retail and corporate super funds, indicating their strong performance in the market.

Net inflows were also a significant factor in the industry, with 24 funds continuing to attract the majority of new investments. While some funds experienced net outflows during the year, many were able to stabilize their cashflows and slow down the outflow rate.

Industry super funds were a standout performer in 2023, with strong inflows supported by stapling and the increased Superannuation Guarantee. As a result, industry funds gained 1% in market share, totaling 38% of the superannuation market, while the market share of SMSFs decreased by 2% to total 29%.

Mega funds, which are the largest funds in the industry, maintained their momentum in FY23 with no new entrants. Despite a marginal decrease in market share, mega funds continued to grow in assets under management and membership, thanks to their investment performance and various growth strategies.

Platform players, particularly platform providers with adviser relationships, also saw significant growth in 2023. These platform super funds experienced strong cash flows, growth in assets under management, and member numbers, as they continued to attract advisers with their investment options and platform features.

Overall, the superannuation industry in Australia experienced a positive turnaround in 2023, with strong investment returns, increased account balances, and growth in assets under management across various sectors. This bodes well for the future of retirement savings in the country.