The SMSF Association has acknowledged the continued strong growth in the sector as well as the ongoing trend of establishment activity from a younger demographic as reflected in the latest ATO statistics.
“The SMSF sector continues to grow, attracting Australians who are engaging with their superannuation earlier and taking a longer-term view of retirement,” SMSF Association chief executive Peter Burgess noted in a recent blog post.
The ATO data showed during the March quarter alone, the SMSF sector recorded net growth of just over 11,000 funds with new entries of 11,687 funds and exits of 658. Over the 12 months to the end of March, the total the number of SMSFs grew by 38,885 to 672,805, representing nearly 1.24 million members.
Further, the figures revealed in the March quarter, 68.5 per cent of new entrants were under 50, which compares to 25 per cent of total SMSF members.
“This is not simply a story about people at or near retirement. Nearly 70 per cent of new SMSF members were under 50, with the largest cohort aged 35 to 44 (38.9 per cent). The income profile of new entrants also points to members with the capacity to build scale in their SMSF over time,” Burgess indicated.
According to the industry body, this scale and the demographics of those establishing SMSFs skewing to a younger cohort mean it is more important than ever for long-term policy settings to support consumers making active decisions about their financial future.
Burgess stressed consumer choice was not the problem, rather the challenge was ensuring Australians who establish SMSFs can access the appropriate advice and protections they need.
“We will continue to advocate for reforms that close the advice gap, improve consumer outcomes and support a strong, sustainable SMSF sector built on affordable advice, effective regulation and fair compensation where misconduct causes loss,” he said.
The statistics from the ATO also revealed more than half of new members in the March quarter, or 52.4 per cent, declared incomes in excess of $100,000.
With total assets under management of $1.06 trillion, SMSFs represent just under 25 per cent of Australia’s $4.44 trillion retirement savings system.
