A question we are often asked is “Should I set up a SMSF?”; this article will inform you of the details of SMSF, provided with the most recent figures possible.
With over $650 billion dollars of Australian funds invested in Self Managed Super Funds (SMSF), it is by far the largest super fund segment of choice. SMSF currently makes up 25% of the total superannuation pie and dwarfs its next closest rival, retail super funds, valued at less than $600 billion each – according to SuperGuide.
SMSF is a private super fund option that allows up to four members to bring their super together for a common investment purpose. Typically, they are used by married couples, but we’ve seen them used between business partners and family units, including children. The benefit of this pooling effect can be that a more expensive investment is affordable, for example – property.
Each year, the Australian Taxation Office releases statistics on the SMSF sector and the most recent relates to 2017/18. You might be wondering – why so old? The reason is because SMSF’s have to lodge a tax return like we do as individuals, and therefore returns are not typically collated until the following years. The average assets per member, in regards to the most recent annual figures from the 2017/18 financial year, is $678,621.
The median age of trustees in 2017/18 is 59 years. It is interesting to note the trends of the age groups opening SMSF’s; the following graph reflects a typically younger demographic who are currently more inclined to set up a SMSF.
SMSF’s are a super investment of choice for many Australians, because they give the most control and flexibility, they can be the least expensive fund to run, and with rapidly moving technology, they are becoming simpler to manage.
This translates into a vast majority of satisfied SMSF members, as reported by Roy Morgan’s 2020 Superannuation Satisfaction Report, with 72.3% of people being satisfied in their fund. This is the second-highest satisfaction level, just under Public Sector Funds with 72.7%.
Coupled with this, the investments available on the ASX that offer simple, diversified and low-cost access to investing, are just some of the reasons SMSF’s are becoming more popular and worthy of consideration.
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With the above in mind, whether you should set up a SMSF is not a decision to be made lightly – so you should speak with a Financial Planner to work out whether SMSF is an appropriate option for you.
Furthermore, to learn more about SMSF, download our eBook below.