By Nicholas Ali
Executive Manager - SMSF Technical Support
The ATO and APRA recently released their self managed super fund quarterly statistical reports which, as always, provides insightful analysis for the SMSF market. It sheds light on the SMSF demographics, fund analysis and investment trends.
Upon analysis, I’ve pulled together some of the most intriguing statistics, which are worth sharing with the SMSF Community.
According to the APRA Quarterly Statistics for June 2021 (released August 2021)1, SMSFs have stabilised at about 25% of the $3.3 trillion super pool with the Industry Fund sector at 28% and the Retail Fund sector at 21%.
The ATO Annual Statistical Summary 2018-19 (released March 2021)2, show only 37% of existing SMSFs have individual trustees and for at least the last 3 years, over 85% of all new SMSFs have corporate trustees. This shows new fund members see the distinct advantages provided by a corporate trustee structure.
Notwithstanding the view held by some that a large amount of money in super is required to establish an SMSF, due to the fixed nature of costs to run a fund, there are still 15% of SMSFs with under $200k in balance size.
At a member level, there are only 9% of SMSFs with member balances greater than $1.6 million.
Investment-wise, Limited Recourse Borrowing Arrangements (LRBAs) represent only 8% ($59 billion) of the total SMSF pool ($822 billion). Ungeared Australian property is double that at 16% ($83 billion commercial and $44 billion residential).
For all the noise and hype, SMSF investment in cryptocurrency only totals $174 million, or a measly 0.022% of the SMSF investment pool.
Of real interest and optimism for the future of the SMSF sector is the demographic that it is establishing the majority of new funds – Generation X, with the average age of new members being just 46.6 years of age.
And the ATO Taxation Statistics of 2018-19 (released June 2021)3 tell us that, in terms of tax, total assessable SMSF income was $28.2 billion.
Over 130,000 SMSFs claimed nearly $12 billion in Exempt Current Pension Income (ECPI). However, this was only about 35% of the total ECPI claimed by superannuation funds.
Over $1 billion in interest expense was claimed for the first time due to LRBAs.
And SMSFs claimed $5.2 billion in franking credits, to receive just over $3 billion as tax refunds.
In total the super industry received a tax refund for 2018-19 of $4 billion.
These statistics give us great insight into the ever-evolving industry. This knowledge facilitates the creation of new ideas which, personally, I think allows us to challenge assumptions and make more informed decisions.
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