Industry funds urged to act amid mounting frustration from advisers

Based on early analysis from Adviser Ratings’ soon-to-be-released 2025 Financial Adviser Landscape Report, dissatisfaction with industry superannuation funds is rife among advisers to such a degree that ProductRex data showed they were “haemorrhaging assets in 2024” from advised clients.

At the same time, platform-based super providers with the highest adviser satisfaction scores reportedly captured significant net inflows totalling more than $16 billion.

According to the firm, the biggest drivers behind advisers’ dissatisfaction with industry funds is the lack of sophisticated tools advisers need to effectively service their clients’ needs, as well as issues with a lack of responsive support or complex client solutions.

Part of this misalignment, according to Adviser Ratings, can be put down to their heritage and how they developed over time.

Where platform providers have built their entire business models around advisers’ needs, industry funds’ foundation was built on workplace relationships, direct member engagement and inertia, with minimal adviser partnership.

Overall, this has put advisers in a position where they need to get clients to make the switch in order to serve them effectively, something that Adviser Ratings suggest should ring some alarm bells for regulators and trustees.

When funds are failing to deliver on clients’ needs, the firm said it suggests “systemic rather than superficial issues”.

“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,” the firm said.

“When advisers struggle with poor systems, delayed responses or limited functionality, the friction transfers to their clients’ experience and potentially their retirement outcomes.”

Despite this dissatisfaction brewing for some time among advisers, many continued to recommend the funds to clients.

According to Adviser Ratings’ research, around a quarter of financial advisers recommend AustralianSuper to their clients even as the fund also received “profoundly negative satisfaction scores”.

The firm also noted similar findings in regard to Australian Retirement Trust, highlighting that it is not an isolated phenomenon.

“The pattern reveals a concerning reality: advisers are directing client money toward funds they fundamentally don’t trust to deliver quality service,” the firm said.

The question then is why would advisers continue to direct clients into industry funds that are difficult to work with?

The short answer, according to Adviser Ratings, is essentially the complex dynamics of client relationships, market inertia and a misinterpretation of what the code of ethics dictates their advice recommendations should be.

To address the root of these issues, the firm suggested that industry funds need to modernise and embrace technology advances in order to stay competitive, not only in the adviser market, but also among Australians in general as younger generations come to expect greater digital capabilities from their service providers.