Recently The Conexus Institute, an independent, not-for-profit body aiming to improve retirement outcomes for Australians, reported that 2025 saw strong outflows of money from industry super funds to adviser driven funds. Since then, there has been much analysis and comment by various publications.

The Australian Financial Review reported that nearly $150 million is leaving the largest industry funds each day. CBUS and REST lost more than $2 billion to rival funds last year. Most exiting members aren’t going to other industry funds, but to funds recommended by financial advisers.

The main reason is they are seeking professional advice about all their finances, not just super, which most industry funds don’t offer. As fund members age and balances grow, they want advice on super, non-super investments such as shares and rental properties, debt management, estate planning and more.

Financial advisers also help them maximise their amounts in the tax-free super retirement phase, within the rules. Members are interested in well-informed, smart advice on the best retirement income products, and strategies to maximise age pensions and eliminate the super death benefit tax.

Many workers got into industry super funds years ago when a Labor Government legislated that people who had not nominated a preferred fund must be placed in the union-aligned industry funds. For many years industry funds were very competitive with low fees and strong returns.

In recent times that has changed. Some public offer funds are now cheaper than industry funds and others around the same price. Some public fund performances have also been ahead of industry funds in recent years. Other specialised options remain more expensive but are competitive after fees.

Industry super funds are still a very good option for younger members with smaller balances and other priorities in life. They are a good set-and-forget choice for the disinterested, avoiding adviser fees. However as members age, most become more engaged with their super and want more service.

Many industry funds own unlisted assets that are not traded on any market. These lack transparency and their valuations have been questioned. Some have been extremely slow paying out death benefits. Some industry and other funds have suffered cybersecurity breaches and IT system failures.

Industry super funds such as Aware have been working hard to engage with financial advisers and gain their support, a positive step. However public offer funds like Hub24, Netwealth, CFS and BT are more adaptable to evolving client and adviser needs.