The latest quarterly SMSF statistics released by the Australian Taxation Office for the December 2011 quarter show some slowing in the growth of the self managed super fund market. The question must be asked:
- is this a result of SMSFs reaching saturation point; or
- is it a result of the lack of Government direction and loss of consumer confidence in retirement savings policy?
The latter issue around loss of confidence in superannuation and investment markets was a key theme addressed in the SPAA/Russell research conducted, which produced the annual “2012 Intimate with SMSFs” report.
New establishments for the December quarter were 5,915, the lowest number of setups since statistics have been published on the ATO website (back to June 2008). On an annualised basis, the 2011 calendar year saw 33,114 new funds established, more than 5% more than the previous year. When looking at net establishments, this percentage is significantly higher (67% net growth) as we have seen 2,769 funds wound up during 2011.
Total fund assets is again around the $400 billion mark, with growth in both cash held by SMSF trustees and listed shares – the growth in shares may have been a combination of ASX movement and some trustees seeing ‘value’ in the market, both from a growth and yield perspective.
Not surprisingly, we are seeing the most growth in assets in Western Australia, 10.4% of total assets – up from 8.8% back in June 2004. It doesn’t seem like much, but when the industry was $127 billion in 2004, this represented $11 billion, today this amount is more than $41.6 billion.
The data on younger entrants was still fairly strong for the quarter, 35.1% of new members were under the age of 45. As I have previously raised in my both presentation at the SPAA conference and also on my blog, many advisers will need to re-think how to deliver education and advice to a younger, more engaged, and web-savvy group of SMSF members. The scaled advice opportunity in my view presents an exciting time ahead for the SMSF industry.
Details of the December 2011 quarter SMSF statistics can be found here, http://www.ato.gov.au/superfunds/content.aspx?menuid=0&doc=/content/00309172.htm&page=1&H1
These latest growth statistics may just be a ‘blip’ on the radar, so we will continue to watch these SMSF statistics with great interest.
I would be interested in your thoughts whether you think these statistics are a result of SMSFs having peaked or a consumer confidence dropping due to Government using superannuation as a political football?
