SMSF sector better for economy than industry funds

SMSFs are doing more good for the Australian economy on a per member basis than industry super funds, according to an SMSF expert.

In a blog post on the I Love SMSF website, company founder Grant Abbott praised the SMSF sector’s performance since its inception 25 years ago and pointed to its growth from 70,000 SMSFs with $11 billion in assets in 1994 to 600,000 funds with $750 billion in assets in June 2019.

“With 600,000 funds there are 600,000 people making decisions on their retirement future – true self-funded retirees. Plus, in excess of 98 per cent of their investments are Australian based, with $106 billion in direct property investment, $171 billion in cash and $228 billion in listed and unlisted Australian equities,” Abbott said.

He highlighted the value of SMSFs as at June 2019 – $1.25 million per fund, or $643,985 per member – as proof the sector was leading industry super funds.

“For their part, industry super funds have $677 billion in assets with 11.6 million members, an average of $58,362 per member. There is no comparison,” he said.

Abbott added he was angered by ongoing attacks from industry super funds that members in SMSFs were making poor decisions by choosing their own retirement vehicle when industry fund members had balances of less than 10 per cent of their SMSF member counterparts.

He also noted the importance of SMSFs to financial markets during the global financial crisis and said they would continue to provide a “strong, secure long-term savings platform for the Australian economy”.

“Next financial year I have lined up to do another 50 or so presentations on SMSFs focused on the passing of SMSF wealth to the next generation, the key strategy for many of the original SMSFs with older members. That money will go back into the Australian economy, so if you ask me, SMSFs are great for Australia,” he said.

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