An assessment of current superannuation data performed by SuperConcepts has shown a noticeable preference that has emerged among SMSF establishments to have the fund service a smaller number of members.
Speaking at the Accounting Business Expo 2023 in Melbourne last week, SuperConcepts SMSF support executive manager Nicholas Ali told delegates: “We haven’t seen much uptake or interest in six-member funds. So [the records show] four or more members [only account for] 3 per cent of our client base. The vast majority are two-member funds.
“But a trend that we are seeing is [a rise in the number of] single-member funds.
“A lot of people who are setting up self-managed superannuation funds are single members.”
According to Ali, situations where one member of a two-member fund passes away leaving the SMSF to continue as a single-member fund is contributing to the shift, but not in a significant manner.
“What we see generally is [where] there is one surviving spouse [from a two-member SMSF] they tend to rotate into an industry fund rather than maintain their self-manage super fund,” he said.
Subsequently he provided an insight into where the rise in single-member SMSFs is coming from.
“Most of those single-member funds are [being generated] by younger people setting up self-managed super funds and they are the sole member [of the SMSF] and sole director of the corporate trustee,” he noted.
With regard to the size of SMSFs, he confirmed there was a noticeable pattern as well.
“Larger SMSFs are proliferating and that’s where we see the growth in the size market is at the bigger end of the SMSF [sector],” he said.
He pointed out the ATO statistics reflecting individual member balances supported this observation.
“If you look at the data, there is 1 per cent of SMSFs with over $5 million of assets, 5 per cent with assets between $2 million and $5 million, and 13 per cent with assets between $1 million and $2 million, so that makes up 19 per cent [of the assets held in the sector],” he noted.
“That number has increased by 33 per cent over the last five years so again we’re seeing much larger funds and much larger member balances in the self-managed superannuation fund system.”
