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07 November 2025 by Adrian Suljanovic

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Investment fees reveal fund differences

  •  
By Alice Uribe
  •  
5 minute read

Smaller super funds still offer cost-effective investment fees, according to legalsuper.

Bigger superannuation funds do not necessarily charge lower investment fees than smaller funds, according to legalsuper chief executive Andrew Proebstl.

"The crux of this issue is that you need to be a certain size to negotiate comparable investment fees. But our argument is that if that's the case, then you would expect that fees of bigger funds would be lower than smaller funds," Proebstl said.

"But if you look at the product disclosure statements (PDS) of different funds, that doesn't seem to be born out."

An analysis of some of the most recent industry fund PDS's shows the $1.2 billion legal industry fund had investment fees of 0.64 per cent.

 
 

This is compared to 0.86 per cent for the $7 billion Hostplus fund and 0.72 per cent for one of Australia's largest funds, AustralianSuper.

However, Deloitte partner Wayne Walker found a different result in recent research completed by the financial services firm.

"We looked at investment fees and we found that there are significant economies of scale. We also found that larger funds were delivering better returns on default options as well," Walker said.

AustralianSuper general manager of business development Paul Schroder agreed and said fund members do not mind paying a little more in investment fees if they received better returns.

"So if you look at those figures, then some funds are a little bit cheaper and some funds are a little bit more expensive, but it's very important to look at how those funds have performed," Schroder said.

He said ultimately it was a "scale game" and it would be difficult for smaller funds to extract savings for members.

 "Many of the costs that face super funds are costs that need to be picked up by the fund regardless of size," he said.

However, Proebstl said smaller, more boutique funds might offer members a better service.

"We are not trying to be all things to all people, which some of the larger funds might be trying to be," he said.

Walker said there were always exceptions to the rule.

"I'm not saying that all small funds are dead or big funds are fantastic, but if you are smaller you have some disadvantages to overcome and you may need to find ways to add tangible benefits to members to offset costs," he said.