MySuper is not a backstop. It is not what you do with your superannuation while you figure what else you should do. It is ground zero and we need to start thinking about MySuper like the superannuation equivalent of Medicare or Public schools. Some wrong-footed superannuation operators are just starting to get this.
And if they aren't, a quick browse of the recently passed 'Improving Accountability and Member Outcomes in Superannuation' and the 'Design and Distribution Obligations and Product Intervention Powers' legislation should fix that.
The not for profit (NFP) sector has meanwhile won the war. They are twice as big as retail, attract twice the contributions and are growing twice as fast. But this victory has come with a twist. It's putting more scrutiny on less competitive or excessively conservative MySuper products that were previously shielded by the rhetoric of the tribal fight between them and their retail opponents.
This is why fewer retail funds hasn't given NFP funds the keys to the Kingdom. It's just resulted in everyone now competing with the heavyweights like they've all been promoted to Premier Division.
In Premier Division no one frets about the Productivity Commission's Best in Show because they know it's already here - the 20 most popular super funds right now attract 80% of all contributions.
Best In Show just brings this into the open. Yet while the market is dominated by two dozen popular superannuation brands, the ones attracting the contributions aren't always the ones with the top performance track records. A smartly run distribution network still seems to beat low fees and top investment returns.
Which is why the penny has finally dropped among regulators that they should no longer exempt the superannuation sector from competition laws. In the meantime we can jaw-bone Australians as much as we like about why they must be vigilant about their choice of super fund. But we also have to be realistic about how hard it is to be a modern consumer.
For many, having to constantly compare choices whether they be schools, banks, health funds, ISPs, smartphones, smartphone providers, media streaming services, electricity providers, and even the type of energy you want pulsating through the wires in your house is just exhausting.
Soon they'll have to compare Aged Care providers, EVs and decide when to dump their ICEs. Having to find a good super fund is just one more thing to be confused about.
Sure it easy for experts to do this but that's not the lived experience of millions of our fellow Australians. It doesn't have to be that way of course because getting a list of Australia's top funds is easy. Rainmaker publishes those lists every month for free as do many other publishers.
Put another way, we need a system where blind Freda can stumble face forward into an at least reasonable fund - and one where she doesn't need a finance degree to understand it. At first glance this seems an environment tailored-made for NFP funds. Trouble is, not all NFP funds have been created equal.
Some genuinely struggle, and with fewer and fewer retail competitors guess which funds will now be taking their spotlight at the bottom of the league tables? This leaves little room for the narrowing list of NFP fund operators to misstep.
Retail funds may be down but they're not yet done. Illustrating this, it may shock some NFP super fund trustee boards to learn that many of their millennial members would have been better off in a bank-owned retail life stage choice these past few years.
It may also shock them to learn some of their younger members aren't just breaking the 3% fee barrier but they have smashed through the 30% barrier. Will this be enough to get retail back into the game? Hard to say, but in any case their next battlefront could be their most daunting: retirement.
NFP funds in 2016 held 37% of retirement FUM in APRA-regulated funds. By June 2018 this share had climbed to 41%. Within five years it could surge past 50%. If retail superannuation allows retirement to be MySupered then we are in the end game. You won't want to miss this blockbuster.