As the latest commercial states, nearly half of all Australian workers are now members of industry super funds.
To date, the most notable impact they have had on the retail funds sector and financial planning industry, however, has been through advertising campaigns - "A lifetime of difference" and, in particular, "Compare the pair".
The compare the pair campaign highlighted in a simplistic manner the difference that paying commissions to financial planners made to super balances, which industry funds do not.
At the time, the FPA said the advertisements devalued financial advice and promoted products that were not necessarily in the interests of their members.
Industry Fund Services (IFS) said the industry funds campaign aimed to quantify the impact fees and commissions have on superannuation payouts, not insult financial planners or downgrade the need for advice.
The ads sparked substantial vocal public complaints and a parliamentary inquiry principally into whether industry super funds should be allowed to advertise.
In June 2005, IFS agreed to change its super choice advertising campaigns after ASIC raised concerns that they could confuse consumers.
The campaigns were suspended in May and were relaunched following an agreement with ASIC whereby IFS had to stop using projections of retirement payouts or future fund balances comparing fees without proper qualification.
IFS also had to stop representing fees as the only relevant factor for comparing funds.
Despite campaigns undergoing changes, the revised compare the pair advertisements still did not sit well with planners.
In September 2006, a brandmanagement survey showed that two in three financial planners felt their business was under siege from industry super funds advertising.
Findings revealed advisers feared the compare the pair advertisements represented a threat to future fund flows, plus they believed the FPA advertising campaign, which featured dodgy advice giver Dazza, had been unsuccessful. According to 69 per cent of respondents, advertising that featured Dazza and his dubious advice, which ran in October 2005 and then in April 2006, failed to bring in new clients.
Almost half of planners also said at the time that the FPA did not do a good job of managing public perception of financial planners and that the industry body was not an effective voice.
Despite the negative response from members, the FPA said the Dazza commercials still worked well as a campaign targeted at consumers, however, it tackled the problem head-on with a new advertising campaign in October 2006.
In a spin on the industry super fund campaign, the new FPA campaign encouraged investors to also compare the pair, showing what additional value a financial planner could offer an investor, emphasising that financial planning advice went beyond just superannuation.
Regardless of the arguments created by the compare the pair ads, the campaign was what largely put the fees versus commissions debate on the map. It was what made a lot of consumers think about the fundamentals of superannuation and exposed the way that imbedded conflicts of interest were inbuilt in commission-based forms of super distribution through the financial advice system.
Like it or lump it, the campaign went a long way in getting the financial planning industry to revise remuneration models, despite many planners feeling it had tarnished their name.
Another event which without real justification seemed to give the thumbs up to industry funds and the thumbs down to retail funds was the release of fund comparison data by the Australian Prudential Regulation Authority (APRA) in August 2009. The APRA results showed that industry and government superannuation funds dominated the performance tables, with 47 of the 50 top performing funds not-for-profit funds.
The Association of Superannuation Funds of Australia (ASFA) slammed APRA's performance tables, saying they provided limited and questionable information to consumers.
ASFA said APRA's fund-level performance data, which covered the period from 2004 to 2008, was a poor indicator of how well different funds had performed as data generally only related to investment returns up until 30 June 2008. As such, the data was a year old and much had happened in investment markets in that time.
ASFA also said APRA's performance criteria was problematic as the best performing funds were determined by questionable comparisons.
Under the methodology, more complex funds that had multiple products and investment options, such as retail funds, were being rated against funds that had limited options and alternative strategies.
Consequently a lot of people felt it was similar to comparing apples with oranges.
Furthermore, many in the industry believed the results were merely just another piece of unjustified ammunition industry funds could use to further their cause.
ASFA also said information regarding the asset allocation of each fund would also assist in interpreting relative performance of funds.
The impact of industry funds has not only been via ads and statistics, however. They have also made their mark by adapting to the choice-of-fund legislation introduced in July 2005.
Under the changes, industry funds could become public offer funds under APRA licensing. This meant that for the first time consumers who were not necessarily tied to a specific occupation or group of occupations could select industry funds for their superannuation.
In December last year, however, the Australia Institute and Industry Super Network said despite the introduction of choice of fund, less than 4 per cent of workers were switching super funds each year.
According to APRA figures released in June this year, despite the growth of industry funds over the years, retail funds are still winning the battle in terms of assets.
Perhaps more surprisingly, however, is the growth of self-managed superannuation funds, which in terms of assets, are now ahead of both industry and retail funds, making it the fastest growing sector in the super industry.
And with some experts saying the landscape of superannuation in the future will see members belonging to either an industry fund or SMSF, perhaps new battle lines have now been drawn.
