APRA figures reveal an SMSF sector in robust health

The SMSF sector has emerged from the 2021-22 financial year in robust health based on APRA’s Quarterly Superannuation Performance figures for the June 2022 quarter.

In the 12 months to 30 June, SMSF assets grew 3% to $868.7 billion – the only superannuation sector to increase assets under management. In the same period total superannuation assets fell 0.5% to $3,312.5 billion, while total APRA-regulated assets fell 1.1% to $2,241.0 billion.

SMSF Association CEO John Maroney says: “Such an increase at a time of high market volatility – especially in the second half – and the ongoing impact of a global pandemic tells a story of remarkable resilience by the SMSF sector.

“It has been underpinned by strong growth in fund establishments, rising property prices and, given the higher proportion of members in pension phase, more defensive asset allocations. [The latest ATO statistics to 31 March 2022 show cash and term deposits at $147 billion or 17.2% of total SMSF assets of $855 billion.]

“From our perspective, what’s particularly encouraging for our sector is the rising number of fund establishments by people under the age of 45, with more than 10,000 funds being set up in 2021-22.

“This should not surprise. In the wake of the Global Financial Crisis in 2008, there was an upsurge in SMSF establishments as people reacted to the poor investment returns, and now the ongoing pandemic and recent market volatility are causing a similar trend.

“But this time around it’s being compounded by the fact that superannuation is now a much larger asset relative to their overall wealth, so it’s not surprising many superannuation fund members are wanting to have greater involvement with their retirement savings.

“When coupled with the benefits of SMSFs in terms of flexibility, the ability to join forces with your spouse to save for retirement, unique tax and estate planning opportunities and portability, then the growing attraction of SMSFs to a younger cohort is understandable.”