Australia’s compulsory superannuation system is entering a new phase where bigger does not automatically mean safer or stickier. Over the next decade, consulting forecasts suggest the number of super funds will shrink from about 75 today to roughly 30 as mergers accelerate and weaker players get absorbed or forced out. The result is a landscape dominated by mega funds that grew up focusing on strong long-term returns and low fees but are now being tested by scandals, changing regulations and a wave of Australians moving from saving to drawing down their super.
Those mergers look set to create “blockbuster” funds, with the typical fund’s assets under management expected to jump from around $39 billion now to about $161 billion by 2035. At the very top end, Australia is on track for its first trillion dollar super fund within the next decade, with the current largest industry fund already managing more than $400 billion for millions of members and signalling it could cross the $1 trillion mark before 2035. However, while funds get bigger they are also seeing meaningful outflows as members nearing retirement shift money to platforms that work closely with financial advisers and that attract them with tailored advice, flexibility and more personalised service.
The competitive pressure is showing up in the numbers. Some of the country’s largest industry funds have recorded net outflows in the 2025 financial year as members rolled their balances into alternative providers. Listed platform operators are the clear beneficiaries, with one major platform drawing in more than $7 billion of net flows from these switches and another adding about $4 billion over the same period. Research from a major consulting firm indicates platforms currently hold only around 6% of all super accounts, yet they are capturing roughly 42% of new retirement account inflows and this underscores how strongly pre-retirees and retirees are gravitating toward adviser-aligned options.
This shift is unfolding while the policy framework for advice inside super funds lags behind member needs. Mainstream funds are still constrained in the type and depth of advice they can offer under existing rules, even as more Australians grapple with complex decisions about timing retirement, drawing an income and managing longevity risk. The federal government has considered allowing funds to give more limited personal advice but that reform now seems delayed as attention turns to rebuilding trust after several high profile failures in the sector that cost about 12,000 investors roughly $1 billion of retirement savings. These collapses occurred via products made available on multiple platforms and this has prompted fresh scrutiny of governance and product selection across the advice and platform ecosystem.
In response, platform providers appear to be tightening up their investment menus. Industry analysis suggests platforms could remove up to 20% of available investment options after current governance reviews and aim to cut weaker or higher risk offerings while simplifying choice for advisers and clients. One major banking group’s platform has already drastically pared back its menu and has trimmed hundreds of options, while a prominent trustee business is part way through its own review and is expected to make similar cuts. The broader direction seems to be towards fewer and better scrutinised options, though how this balance between choice, oversight and innovation plays out will shape whether platforms can sustain their current edge over super funds in the retirement market.
