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07 November 2025 by Adrian Suljanovic

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Flipping phenomenon alive and well: survey

  •  
By Alice Uribe
  •  
6 minute read

Industry pundits call on the federal government to ban "flipping" as a new survey reveals it is still happening.

Super hit the front page of the papers again recently and, unfortunately, it was for all the wrong reasons.

Just when you thought it was safe to open your member statement, the Sydney Morning Herald (SMH) has reported that more than 100,000 Australians have copped higher fees, some as much as $523, after changing or losing jobs.

The SMH article was based on the findings of a SuperRatings report commissioned by the Industry Super Network (ISN), which revealed that the phenomenon of "flipping", whereby workers are automatically transferred from a wholesale super fund to a higher fee personal super fund when they leave their job, was still alive and well.

This is despite the Australian Prudential Regulation Authority (APRA) advising former superannuation minister Nick Sherry that 115,000 super fund members had been hit with higher fees after switching.

 
 

According to SuperRatings managing director Jeff Bresnahan, flipping is still going strong "and most people would not even be aware that it is happening".

The SuperRatings research revealed that the increase in fees can be as high as 60 per cent when the worker is flipped and it can result in an increase in fees and commissions and a decrease in insurance benefits for members, or an increase in premiums.

For Bresnahan, one of the most disappointing aspects of the continuation of flipping is the fact that it is shattering the confidence of Australians in their super system, just as members are feeling there may be light at the end of the tunnel.

"We know how pathetic Australians are about their super and I'm sure the letters from the funds are worded in such a way that they don't highlight that the changes would increase fees," Bresnahan said.

And, according to Bresnahan, the practice of flipping happens mainly in the retail sector.

"It would appear that it's happening in the retail space. Industry funds don't have the division between funds and there are no material changes when people change jobs," he said.

Despite the fact Investment and Financial Services Association chief executive John Brogden told the SMH that the higher fees "reflected the loss of discounts negotiated by employers", Bresnahan said the extra costs were "unwarranted".

"It's not rampant through every fund, but it is in specific products," Bresnahan said.

Colonial's FirstChoice fund was named in the SMH article as a key offender, with employees being slugged up to $475 a year when they moved out of their company's super plan into a personal option.

Colonial did not respond to Investor Weekly's requests for comment about its fee structures.

Despite the silence from the retail sector, Bresnahan said flipping needed to be stopped.

ISN has called on the federal government to immediately ban flipping.

"It is hard to reconcile the practice of automatically flipping workers out of wholesale super funds into higher cost personal super funds with a requirement to act in a member's best interests," ISN spokesperson David Whiteley said.

"Where they are receiving a commission, financial planners have a moral obligation to ensure informed consent from consumers about such changes to superannuation fees and insurance arrangements."

And for Bresnahan, it all comes back to funds being open and honest with members.

"It's an issue that needs to be fixed as consumers are getting ripped off unknowingly," Bresnahan said.

"The issue is transparency, and obviously a lot of entities are worried about complete transparency."