The most recent annual SMSF figures released yesterday by the ATO reveal the sector performed well during the 2017 financial year and can continue to expect strong results for the foreseeable future, according to the SMSF Association.
Association chief executive John Maroney said: “In the year under review, SMSFs made an average return of 10.2 per cent compared with a 9.1 per cent return for the APRA (Australian Prudential Regulation Authority)-regulated funds.
“At the same time the total expenses for all SMSFs fell by nine basis points, of which five basis points can be attributed to lower administrative and operating expenses, highlighting the increased use of technology and software in SMSF administration services.”
Maroney was referring to the expense ratios released by the ATO, which show total expenses fell from 1.26 per cent in 2015/16 to 1.17 per cent in 2016/17. Of this figure, administration and operating expenses fell from 0.56 per cent to 0.51 per cent, and investment expenses fell from 0.69 per cent to 0.66 per cent.
The data also revealed a substantial increase in the value of median assets when an SMSF is established, which jumped to $320,000 in 2016/17 after previously holding steady in the low $200,000 range, and which Maroney attributed to “the impact of improved adviser standards and trustee education on the SMSF sector”.
The numbers released by the ATO reflect the performance of SMSFs over a period of five years up to and including 2016/17, ahead of changes which introduced the $1.6 million transfer balance cap and changes to concessional and non-concessional contributions.
“These statistics provide an important antidote to the many misconceptions about SMSFs, especially in relation to their performance and costs, as well as providing highly relevant information that can be used to improve our superannuation sector,” Maroney said.