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SMSF practices with high fund numbers lead market

Small medium-sized SMSF practices funds

Small and medium-sized SMSF practices are the dominant advice providers, servicing more than half of the funds administered by one service provider.

Medium-sized SMSF practices that administer 101 to 250 funds are the largest group servicing SMSFs, covering nearly 27 per cent of funds, according to Class, which also found small SMSF practices service nearly the same amount of funds.

The numbers were released as part of the administration services provider’s latest “SMSF Benchmark Report”, which showed that of the 1534 SMSF practices using Class services, 305 medium-sized practices serviced 45,993 SMSFs, or 26.8 per cent of the 170,000 funds administered by the firm.

While this group represented around 20 per cent of Class subscribers and had an average of 151 SMSFs on their books, the small SMSF practice sector oversaw a similar total number of SMSFs.

According to Class, this sector – which is defined as servicing 25 to 100 funds – serviced 41,032 SMSFs, or 23.9 per cent of those administered by Class, but did so across 765 practices, which had on average 54 SMSFs on their books.

The other sector to service similar total numbers of SMSFs was the major administrator sector, which had only 17 groups using Class services but administered 23.3 per cent, or 39,903 funds, of the 170,000 funds administered by Class. Each group serviced an average of 2347 funds.

The report noted very small-scale SMSF practices, which were labelled as general accounting practices, typically had an average of 10 SMSFs, but only represented 3411 funds, or 2 per cent of the total funds overseen by Class.

“While small firms – less than 25 SMSFs – are still a significant subscriber category on Class, a typical small SMSF practice for Class has between 25-100 funds,” it stated.

“The SMSF industry is consolidating and we would expect that percentage to decrease over time. This trend among Class customers will also be driven by the higher growth rates of businesses on Class.”

The Class SMSF Benchmark Report also found that mixed phase SMSFs held more average assets per fund than the combined total of accumulation-phase and pension funds.

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