The Rice Warner Superannuation Market Projections Report found that the super market (excluding SMSFs) shrank from 872 funds to 244 in the decade ending June 2016.
The consolidation of the sector in the 10 years to June 2016, which equates to a 72 per cent reduction in funds, is one of the "main driving forces that shapes the industry", said the report.
Many funds in the super sector are continuing to shrink, with 83 of 219 funds experiencing negative net flows in 2016.
"Funds compete now on services more than at any other point in the history of superannuation," said Rice Warner.
"Smaller funds will find themselves unable to compete effectively as this continues, and the upcoming framework for retirement products (CIPRs) will likely exacerbate the divide."
Projecting towards June 2021, the report predicted that the number of funds will reduce by 39 per cent to 149.
The predicted 149 funds in 2021 are likely to comprise 24 corporate funds, 30 industry funds, 22 public sector funds and 73 retail funds.
Rice Warner predicted there will be nine funds with FUM of more than $20 billion by June 2021, including four funds (two industry and two public sector) with FUM over $50 billion.
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