"Fat Cats" and banks are eating Aussies' superannuation: Stockspot

Aussie robo-advisor has called out the high fees of the superannuation industry

Aussie robo-advisor has called out “fat cat” superannuation funds for charging unjustifiable fees.

Australian men are more likely to leave their wives than their superannuation fund.

And it’s a big problem, says Australia’s top robo-advisor, because many super funds are run by “fat cats” that take vast sums of retirees’ money in fees.

Around A$45 billion sits in “fat cat funds” which have taken a whopping $600 million in fees the last 12 months, new research by Stockspot has found.

The report defines fat cat funds as super funds that lose to their benchmarks by a 10% margin or more over one, three and five-year periods.

“We found that 217 fat cat funds of 2015 are still fat cat funds in 2017 and there are billions trapped in them today,” said Chris Brycki, Stockspot CEO.

“By far the big banks continue to control the most fat cat funds.”

ANZ was handed Stockspot’s gold medal for being the greediest kitty for the fourth year in a row. Aussie money manager AMP took home silver and the Commonwealth Bank, Australia’s largest company, got bronze.

In a warning targeting young Australians, Mr Brycki said these fees meant that fat cats could eat away at as much as 49% of returns, leaving Aussies with less money when they retire.

He also said that calling out fat cats was important because the stigma can force superannuation funds to lower their fees.

“Naming and shaming the worst offenders is making a difference with the number of fat cat funds beginning to fall,” Mr Brycki said

“There has been a 18% decrease in the number of fat cat funds from 638 in 2016 to 521 in 2017, with some fat cat funds closing and others reducing their fees.

“In some parts of life, paying more gives you more. Investing doesn’t work that way. Every dollar you pay comes directly out of your retirement lifestyle…the more you pay, the less you get.”

Full report available here.

This article first appeared on www.roboadvicenews.com