I don’t know about you, but I have been heavily promoting SMSFs since their inception – a quarter of a century ago. I have presented on more than 2,000 occasions on SMSFs, current laws and strategies and the big one at the moment being SMSF estate planning. It is amazing when I think that in 1994 when it all started there were only 70,000 super funds that elected to become SMSFs with $11Bn in assets – or $157,000 on average per fund.
At June 2019, there will be 600,000 SMSFs with $750Bn in assets – or $1,250,000 per fund and a staggering average $643,985 per member. In the last year over 20,000 new SMSFs were established. Now if that is not a super success story I don’t know what is. With 600,000 funds there are 600,000 people making decisions on their own retirement future – true self-funded retirees. Plus, in excess of 98% of their investments are Australian based with $106Bn in direct property investment, $171Bn in cash and $228Bn in listed and unlisted Australian equities.
But let’s compare the pair as the Industry Funds like to say. For their part Industry super funds have $677Bn in assets with 11.6M members – an average of $58,362 per member. There is no comparison, so when I see articles that members in SMSFs are making poor decisions by choosing their own retirement vehicle, it gets me angry. The constant attacks by large institutional super funds holding, on average, member balances less than 10% of their SMSF member counterparts and well I think you know how I feel.
But the worst is the SMSF advice and administration businesses who complain that constant change is too much, and they wish it would stop. Well here’s my take, it won’t. We have got a Prime Minister now who, hopefully unlike the 2016 May Budget will give SMSFs some clear air and perhaps turn the torch and spotlight on Industry Super Funds. So as they say make hay while the sun shines and if you even have an inkling, a feeling that SMSFs are too hard for you, then either get schooled up on the latest SMSF strategies and trends (whether you use them or not, you have to know them) or sell your business, there are some great, successful SMSF businesses out there with engaged, motivated clients making great returns who will happily buy you out.
Anyway, to answer the question – has the aggressive growth of SMSFs been good for Australia? Absolutely! SMSFs providing a strong, secure long-term savings platform for the Australian economy. I lived through the GFC and saw how important they were to the financial markets when they were going down. Next financial year I have lined up to do another 50 or so presentations on SMSFs focused on the passing of SMSF wealth to the next generation, the key strategy for many of the original SMSFs with older members. That money will go back into the Australian economy so if you ask me – SMSFs are great for Australia!
Grant Abbott – firstname.lastname@example.org