Accounting, Superannuation

SMSF sector leads in growth, assets

SMSF sector growth assets

A new report into financial services has noted the growth of assets and funds in the SMSF sector, which still holds a dominant place within superannuation

The SMSF sector is a leader in terms of the assets it holds and its growth over time, according to an industry overview released by the Financial Services Council (FSC).

Drawing on data from regulators and industry researchers, the FSC’s “State of the Industry Report 2019” showed, as of March 2019, SMSFs held $746.6 billion, or 26.8 per cent, of superannuation assets, ahead of the industry fund sector, which held $677.5 billion, or 24.3 per cent, of superannuation assets.

Public sector and retail superannuation held around 22 per cent of assets, with $691.8 billion and $623.4 billion, respectively.

The report also highlighted SMSFs held the largest amount of superannuation assets as a share of gross domestic product at just over 40 per cent compared to retail and industry funds at about 34 per cent each at the end of 2018 financial year. SMSFs had grown that share from 15 per cent in 2004, at which time retail super was at 24 per cent and industry funds at 10 per cent.

SMSFs were also the only superannuation segment to record a growth in fund numbers from June 2004 to June 2018, due to their individual nature, with the report noting a 120 per cent increase from 271,515 funds in 2004 to 596,225 funds in 2018.

At the same time, retail and industry funds declined heavily in number, with retail funds dropping from 313 to 118 (a 61 per cent decrease) from 2004 to 2018 and industry funds dropping from 75 to 38 (a 49 per cent decrease) over the same period. Corporate super funds, however, recorded the largest decline from 1008 in 2004 to 24 in 2018.

The report highlighted that while superannuation was expected to continue to grow, the industry fund sector would overtake the SMSF sector by around mid-2020 and exceed it in terms of assets by 2033. At that time, the industry fund sector would have $1.75 billion compared to $1.4 billion in the SMSF sector and $1.1 billion in the retail sector.

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