The SMSF Association today said the latest ATO annual SMSF statistics painted a glowing picture of the sector, with new members and funds growth steady, and investment returns and expenses competitive with the Australian Prudential Regulation Authority (APRA)-regulated sector.
“The ATO statistical overview for 2014/15 reveals a very positive set of numbers,” SMSF Association chief executive Andrea Slattery said.
“All the indicators show solid growth, with the average assets of SMSFs reaching $1.1 million – a growth of 20 per cent over five years.
“There were 577,000 funds – 99.5 per cent of the number of super funds – with growth over the past five years of nearly 6 per cent; a sustainable increase.”
The statistics also revealed there were now nearly 1.1 million SMSF trustees or members, with the split being 53 per cent male and 47 per cent female.
Slattery said it was encouraging to see two trends related to women and fund establishment, with younger people increasingly setting up SMSFs and strong growth in women’s balances over the past five years.
“The fact women’s average balances have risen 24 per cent to $498,000 over the past five years – it was up 17 per cent to $633,000 for men – is a very exciting development,” she noted.
“It is further evidence that women are becoming far more involved in their SMSFs, either individually or by getting specialist SMSF advice.
“It’s also a cue to SMSF specialists that there is a growing market of female trustees and members who are looking for advice as they become far more hands on.”
New advice requirements for women have been a focus for the SMSF Association, including providing new advice designs and having proficient specialist members in this area.
In addition, Slattery said the fact the median age of SMSF members of newly established funds had fallen to 48, compared to 59 for all SMSF members at 30 June 2015, was a welcome demographic shift.
“It shows younger people are being actively involved in their retirement income strategies and this can only enhance their ability to achieve a dignified and secure retirement,” she noted.
According to the tax office, SMSF investment returns in 2014/15 were 6.2 per cent, consistent with the returns of the APRA-regulated sector.
“SMSF trustees continue to demonstrate they are able to generate healthy returns despite the market volatility post the global financial crisis,” Slattery said.
“Although there are still sceptics who remain highly critical of SMSF asset allocation, the evidence is that is has served them well.”
For the first time in the statistical report, the ATO dissected SMSF expenses into investment and administration and revealed the estimated total expense ratio for SMSFs as funds in 2014/15 was 1.1 per cent.
When split between investment and administration, they were 0.5 per cent and 0.6 per cent, respectively. Per member, that ratio would be lower again, the report said.
When it came to asset allocation, Australian listed shares, and cash and term deposits held the bulk of investments at 57 per cent, and 81 per cent of all investments were done directly.