The $16 Billion Vote of No Confidence: How Platform Super is Crushing Industry Funds

The Australian superannuation industry faces a troubling paradox that exposes fundamental flaws in how some of the nation's largest funds serve their members. Despite commanding massive market share and brand recognition, major industry superannuation funds are failing dramatically in their relationships with the financial advisers who guide millions of Australians' retirement planning decisions.

Early analysis from the 2025 Australian Financial Advice Landscape Report reveals a stark disconnect between fund usage and adviser satisfaction that should alarm regulators, trustees, and members alike. AustralianSuper, the nation's largest fund with over $300 billion in assets, is recommended by around a quarter of financial advisers to their clients. Yet the same fund records profoundly negative satisfaction scores from these same advisers, indicating they are more likely to criticise than praise their services.

This isn't an isolated case. Despite also being used by around a quarter of advisers, Australian Retirement Trust similarly struggles with adviser satisfaction. The pattern reveals a concerning reality: advisers are directing client money toward funds they fundamentally don't trust to deliver quality service.

The Numbers Tell a Damning Story

The financial implications of this disconnect are already materialising. ProductRex data tracking actual money movements through adviser recommendations shows industry funds hemorrhaging assets in 2024, with major players experiencing substantial net outflows from advised clients. Meanwhile, platform-based superannuation providers with the highest adviser satisfaction scores—led by HUB24 Super, Netwealth Super, and Colonial First State FirstChoice—captured significant net inflows totalling over $16 billion.

This represents more than competitive pressure; it signals a fundamental breakdown in the value proposition that industry funds offer to the advice channel. When advisers consistently rate platform providers higher across virtually every service category—client experience, adviser support, functionality, and investment options—it suggests systemic rather than superficial issues.

The data reveals that platform providers aren't just winning by narrow margins. Top-rated platforms consistently achieve strong satisfaction scores across all measured categories, while industry funds struggle to reach basic satisfaction thresholds. In overall satisfaction rankings, UniSuper leads industry funds but only appears in ninth place, with major players like AustralianSuper and Australian Retirement Trust recording negative satisfaction scores.

Understanding the Dysfunction

Why do advisers continue recommending funds they rate poorly? The answer lies in the complex dynamics of client relationships, market inertia, and (mis)perceptions of what the Code of Ethics purports to require their advice recommendations to be. Many clients arrive at advice relationships already holding accounts with major industry funds through workplace arrangements or existing memberships. Advisers often find themselves managing disappointing service experiences rather than choosing optimal solutions.

"While industry funds have attractive pricing, it doesn't compensate for limitations in other areas for our practice," explains one adviser surveyed in the research. This comment captures the broader frustration: competitive fees don't offset poor operational execution, limited technology capabilities, or inadequate adviser support.

The problem compounds when considering client demographics. Industry funds built their success around workplace relationships, direct member engagement, and inertia, not (in general) adviser partnerships. Their systems, processes, and cultural priorities reflect this heritage, creating friction when advisers need sophisticated tools, responsive support, or complex client solutions.

Platform providers, conversely, built their entire business model around serving adviser needs over the past two decades. They invested heavily in technology infrastructure, support teams, and operational processes explicitly designed for advice-supported distribution. This explains why platforms dominate satisfaction rankings across all measured categories.

The Member Impact

This adviser dissatisfaction isn't merely a business-to-business service issue—it directly impacts member outcomes in ways that should concern ASIC, APRA, and trustee boards. When advisers struggle with poor systems, delayed responses, or limited functionality, the friction transfers to their clients' experience and potentially their retirement outcomes.

The research reveals different satisfaction drivers for advisers serving different client types. For accumulator-focused advisers, client experience and ease of onboarding rank as the strongest predictors of overall satisfaction. For retiree-focused advisers, adviser experience and overall performance become paramount, with pricing sensitivity significantly lower than for accumulator clients. Industry funds' poor performance across these crucial categories suggests they fail their members at critical life stages.

Recent regulatory scrutiny adds another dimension to these concerns. ASIC and APRA's intensified focus on superannuation governance, highlighted through CEO roundtables and operational resilience standards, directly connects to service delivery quality. The regulators have warned explicitly about disconnects between boardroom oversight and operational execution, precisely what the adviser satisfaction data reveals.

When ASIC issues stern warnings about death benefit payment delays and calls for improved member outcomes, trustee boards should examine how adviser dissatisfaction might signal broader operational dysfunction. Poor adviser experience often reflects underlying systems limitations, process inefficiencies, or cultural misalignment that inevitably affects all member interactions.

The connection between adviser dissatisfaction and broader operational dysfunction became starkly apparent this week with HESTA's administrative crisis. The $93 billion fund locked its 1.1 million members out of their accounts for seven weeks while switching administrators. Since reopening on June 2, members have faced hours-long call waiting times, staff unable to identify accounts, and significant delays in basic services—precisely the operational execution failures that drive adviser frustration across the industry.

HESTA's crisis exemplifies how technology and operational weaknesses ripple throughout the member experience. When funds struggle with basic administrative competency, it validates advisers' concerns about recommending such providers to their clients. 

Technology: The Widening Gap

The satisfaction data reveals a technology crisis within industry superannuation that extends beyond adviser relationships. Platform providers consistently outperform on functionality ratings because they built modern, integrated systems designed for digital advice delivery, with top platforms achieving the highest satisfaction scores in this category.

Industry funds, burdened by legacy systems and built for different distribution models, struggle to provide the seamless digital experiences that both advisers and members increasingly expect. Recent industry reports confirming that "legacy systems are holding super back" from digital transformation goals directly correlate with these satisfaction findings. As noted, the recent events at HESTA demonstrate how legacy system dependencies create operational vulnerabilities that affect millions of Australians' retirement savings.

This technology gap matters more as younger members enter the system with higher digital expectations, as the advice profession evolves toward more efficient, technology-enabled service models, and as we reach the peak retirement tsunami in the coming years, where advice efficiency is going to be paramount to serving increasing numbers of clients. Funds that can't provide intuitive interfaces, real-time data access, or streamlined processes risk becoming increasingly irrelevant, not only in the advice channel but with the broader member cohort.

A Path Forward

The industry fund sector's response to this crisis will determine whether it can remain competitive in an increasingly sophisticated marketplace. The solution requires more than superficial service improvements—it demands fundamental reconsideration of how these funds approach adviser relationships and technology infrastructure.

Successful transformation would require industry funds to invest heavily in adviser-focused technology, rebuild operational processes around adviser needs, and develop cultural competencies in partnership-based distribution. Some funds, like UniSuper, demonstrate this is achievable, ranking as the highest industry fund by adviser satisfaction while maintaining competitive member outcomes.

The regulatory environment supports this transformation. Quality of Advice Review reforms creating more flexible advice delivery models will increase demand for responsive, technology-enabled superannuation providers. Funds that modernise their adviser capabilities will capture opportunities, while those maintaining status quo approaches risk continued member attrition through the advice channel.

Implications for the Future

The adviser satisfaction crisis extends beyond competitive dynamics to fundamental questions about member outcomes and industry sustainability. When major funds with millions of members deliver consistently poor adviser experiences, it suggests systemic challenges that regulatory oversight alone cannot address.

Trustee boards must recognise that adviser satisfaction directly correlates with member outcomes in an advice-supported environment. Poor adviser experience translates to member friction, delayed implementations, and suboptimal retirement planning outcomes.

For the broader industry, this disconnect represents a massive opportunity cost. Effective adviser relationships could significantly expand quality advice access for fund members, improve retirement planning outcomes, and strengthen the superannuation system's member value proposition.

The choice for industry funds is clear: invest in genuine adviser relationship capabilities or accept continued irrelevance in an increasingly advice-supported marketplace. For members' sake, and for the system's long-term health, the transformation cannot wait.

For the first time, the soon-to-be-released 2025 Adviser Ratings Financial Adviser Landscape Report will comprehensively analyse the superannuation sector, exploring these issues in greater detail. A separate Superannuation Report will also be available for superannuation funds seeking a more thorough assessment of their own feedback.

Was this helpful content?Let others know - share and vote-up