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SMSF returns reflect adviser efforts

The SMSF sector’s returns matching Australian Prudential Regulation Authority (APRA)-regulated fund returns during 2015/16 demonstrates the hard work of SMSF specialists who advise many members about their investments, the SMSF Association has said.

The “Self-Managed Superannuation Funds: A Statistical Overview 2015/16” report released last week revealed SMSFs experienced the same return on investment, 2.9 per cent, as APRA funds of more than four members.

SMSF Association chief executive John Maroney said the strong performance of SMSFs, the fifth consecutive year of positive returns, was a clear endorsement of the specialist advisers involved in members’ investment portfolios.

Maroney said the sector was delivering on the government’s objective for superannuation to provide income in retirement, with 94 per cent of all SMSF benefit payments being in the form of a pension, with the median pension $63,000 a year.

“This high percentage of pension use by SMSFs has been a consistent positive aspect of the sector as highlighted in the ATO’s annual statistical publication over a long period,” he noted.

The statistics also provided timely evidence to disprove recent alarmist headlines that SMSFs were responsible for a surge in Australian household debt, he said.

“The figures show that total borrowings by SMSFs using limited recourse borrowing arrangements total about $23.5 billion or only 4 per cent of all SMSF assets – hardly a number that would suggest SMSFs are on a borrowing binge,” he said.

He highlighted that a high percentage of new SMSF establishments had a corporate trustee, at 81 per cent, with overall statistics showing 57 per cent of all SMSFs are managed through a corporate trustee structure.

“The SMSF Association has always advocated that corporate trust structures are best practice due to their advantages for SMSF administration, succession planning and ageing trustees,” he said.

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