subscribe to our newsletter

ASIC releases report on competition in the managed funds sector 

asic smsf
Tony Zhang
27 September 2021 — 1 minute read

The Australian Securities and Investments Commission (ASIC) has released a report on the state of competition in Australia’s funds management industry.

ASIC commissioned independent research by Deloitte Access Economics (Deloitte) to examine competition between fund managers with a focus on outcomes delivered to investors in retail managed investment products. 

Deloitte’s research found that retail investors are a small fraction of funds under management, at 5 per cent, but the managed funds industry affects a much larger number of Australians through superannuation.  


The managed funds industry is competitive, as evidenced by new market entrants, innovation, and low fees by global standards.

“There is no single source of truth that allows for direct comparison between funds. Retail and wholesale investors are sensitive to the performance of funds, ASIC said on the findings of the report. 

Economic transaction costs affect investors’ decisions to buy, sell, and change managed funds. These transaction costs are not, however, always transparent and may lead to investors remaining in underperforming funds.

“Retail investors are not highly engaged with funds management. There are many intermediaries between fund managers and retail investors, and this can create conflicts of interest. 

“There is also competition between fund managers on fees and discounts. However, retail investors may not receive the full benefits of competition due to principal-agent issues and issues around transparency whilst some participants in the managed funds industry have conflicts of interest, and this could affect outcomes for retail investors.”

ASIC noted it will take these findings into account in its ongoing work to support effective competition in the funds management industry and to improve investor outcomes.

The Deloitte report has been provided to Treasury and the Australian Competition and Consumer Commission (ACCC).

Under the Australian Securities and Investments Commission Act 2001, ASIC is required to consider the effects that the performance of its functions and the exercise of its powers will have on competition in the financial system.

ASIC engaged Deloitte in December 2019 to assess the extent and effectiveness of competition in the funds management industry, factors that drive competition in the industry to produce positive consumer outcomes. 

This also includes the impact that increased competition may have at an investor, industry and wider economic level; and factors that may inform ASIC’s exercise of its regulatory function to promote competition in the funds management industry.

The work was deferred for a period due to the significant impact of the COVID-19 pandemic on the funds management industry last year.

In March 2021, Deloitte produced an interim report on the effectiveness of competition and invited industry stakeholders to make submissions on the findings. A number of submissions were received and considered before the release of the final report.

ASIC releases report on competition in the managed funds sector 
asic smsf
smsfadviser logo

Are you up to date with the legislative changes from 1 July? Contribution cap increases, super guarantees, age increases, SG rate increases. The budget announcement changes. Don’t be caught off guard by your clients’ questions. Prepare for any scenario with the SMSF Foundations course. 21 CPD hours available. Learn more

Arm yourself with the critical information that you need to ensure you and your clients continue to thrive in today’s changing environment at the free-to-stream SMSF Adviser Technical Strategy Day. Live streamed directly to you in October over three days, this event is jam-packed with expert-led sessions to arm you for success by providing the latest updates on regulatory and legislative changes impacting SMSFs. Secure your free spot today, visit www.smsfstrategyday.com.au

join the discussion

Latest poll

Do you have clients that are aged 65 or 66 planning to trigger the bring forward rules?


Get the latest news and opinions delivered to your inbox each morning

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.