Where do you start?

With the trustee of superannuation money spending months weighing ways to not return millions of dollars of its customers' money taken for fees where no service was provided?

With the 'service' customers got for the fee they paid, which one bank attempted to suggest, was for receiving marketing material?

With a bank, asked for every document about the issue of 'fee for no service', handing over 31 documents by the royal commission's deadline. And then more than 3,000 just days before they're set to be examined?

With a fund chief executive who isn't concerned by a regulator slamming its lax governance and finding shareholders' interests are favoured over customers, and begrudgingly making changes (not because they agree) simply to stop the complaints?

Or even, perhaps, the same fund standing accused of using members' reserves to partially fund compensation to those same members?

These examples, the first three from bank NAB, the final two from financial services company IOOF, were just snapshots of a dispiriting week examining superannuation at the banking royal commission.

Compulsory superannuation is an incredible system, envied around the world, for helping citizens to build a financial base for their retirement during their working lives.

But at the same time, you couldn't make up a business as incredible as compulsory superannuation. It's a dream.

Whether you're brilliant at managing other people's money, good or, in the worst cases, terrible — it doesn't matter. Not a bit.

Nearly 10 per cent of every single dollar employees earn in Australia just rolls in the door ever year.

Retail funds, also called 'for-profit' funds, are run by the big banks and wealth management institutions like IOOF and AMP and represent about half the super funds under management in Australia.

Self-managed super funds (SMSFs) make up about 10 per cent, but are generally run through 'platforms' run by the retail funds, so get lumped in there.

Industry funds like Australian Super — the ones with the incessant 'cupping hands' ads — make up the rest.

NAB grilled over 'fee for no service'

This week the commission accused NAB — through Nicole Smith, the ex-chair of its superannuation trustee Nulis — of being in a hopelessly conflicted position.

That's because it was asking related entities of NAB to investigate, and then potentially return, millions of dollars in fees for no service it had taken from customers.

Counsel assisting, Michael Hodge QC, put it this way:

Hodge: It's the wealth division that's been taking this money? Smith: Yes Hodge: It's been increasing its profit? Smith: Yes. Hodge: If it has to pay this money back, it'll be the wealth division that has to pay this money back? Smith: Yes. Hodge: It's hopelessly conflicted isn't it?

Ms Smith countered that the administrator management was "in a conflicted position, [but] I do not believe it is hopelessly conflicted".

Sorry, this video has expired Nicole Smith gives evidence about the "fees for no service" scandal.

The commission dragged NAB through nearly four days of exhausting hearings.

Any customers of NAB, MLC or its other superannuation brands who tuned in would struggle to feel that their interests were being taken care of.

But probably the most amazing thing that happened in this first week, of a fortnight of hearings about the $2.7 trillion superannuation sector, was what didn't happen.

Spotlight passes over industry funds

The birth of the royal commission was highly politicised. Minor parties then Labor pushed for it, with the Coalition Government resisting.

Renegade members of the National Party applied pressure and, eventually, the Government created the royal commission and set the terms of reference of what it would look at.

The inclusion of superannuation was seen by political commentators as a way to get at the industry super funds.

The Government has tried and failed to legislate to put more independent directors on the boards of these funds.

Generally, half the board members are linked to industry groups, with the other half linked to unions.

Those members generally donate their directors' fees to the unions.

So the prospect of peering into industry mega-fund CBUS was juicy.

Linked to the Construction Forestry Mining Energy Union (CFMEU) — since merged with the equally controversial Maritime Union of Australia (MUA) to make the acronym soup CFMMEU — the fund has $46 billion under management.

But on Monday, it was excused.

The royal commission asked for CBUS documents, examined them, and decided to leave it there.

For people wanting a searing examination of industry funds, which have long had better financial returns to customers than the for-profit funds, the disappointment got worse.

Australian Super, Australia's biggest fund, sailed through its examination.

Australian Super chief executive Ian Silk gives evidence at the royal commission. ( Supplied: Royal Commission )

The level of discussion, debate and analysis the $140 billion fund put into preparing for a $2 million investment in a news website, The New Daily, was both exhaustive and debated at board level.

After all that, it was revealed that the investment was less than the cost of mailing a letter to every member, once.

Further, the fund's chief executive Ian Silk was examined about the political nature of a series of TV advertisements called "Fox in the henhouse" about how retail funds are a bad deal for consumers.

The question was how it was in members' best interests to spend the money.

Mr Silk defended the campaign as a way to safeguard the broader system of industry funds.

Best interests? Commissioner Kenneth Hayne will make up his own mind.

But forget 30 seconds of pictures of foxes, emotive music and a scary voiceover about retail funds. We just sat through four days of evidence about them that was truly terrifying.

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