Interest rising in SMSF set-up
Interest in setting up an SMSF among those in APRA-regulated super funds is on the increase, while the average balance and age of new SMSF trustees have declined, according to Investment Trends data.
The research firm’s 2019 SMSF Reports surveyed almost 5,000 investors and found that 21 per cent of those who did not have an SMSF were either planning to or actively in the process of setting up a self-managed fund, up from 19 per cent in 2018 and 18 per cent in 2017.
At the same time, the data indicated that the age and balance level of new SMSF members were falling, with those who had set up a self-managed fund between 2015 and 2019 having a median age of 47 and a super balance of $230,000.
This compared to a median age of 50 and balance of $320,000 for those who had set up an SMSF between 2011 and 2014, and a median age of 52 and balance of $420,000 for those who had set up a fund between 2006 and 2010.
Among those who intended to set up an SMSF, balance levels and ages were even lower, with an average super balance of $40,000 and age of 35.
A higher level of investors than previous years also indicated they planned to set up an SMSF based on word of mouth, with over 25 per cent of those who intended to set up a self-managed fund saying they were planning to do so on advice from a friend who already had an SMSF, up from 21 per cent in 2018.
Around 23 per cent of potential new SMSF members said they wanted a self-managed fund to achieve more control over their investments, while 21 per cent said they were planning to set one up to achieve better returns.
Among existing SMSF trustees, direct shares continued to be the most popular asset class to achieve these improved returns, with an average of 35 per cent of SMSF portfolio assets allocated to shares outside managed funds and ETFs.
However, this was down on 36 per cent in 2018 and 37 per cent in 2017, while over the same period, direct property allocations had increased by 1 per cent per year to 13 per cent in 2019.
While the top three SMSF asset classes were still direct shares, cash and property, trustees demonstrated a preference for gaining international equities exposure, with 35 per cent saying they planned on investing in international shares within the next year.
Enthusiasm for international investing was highest among those with a financial planner, where trustees on average expected to have 18 per cent of their portfolio invested in international assets by 2020.
Sarah Kendell
19 September 2019
smsfadviser.com
Latest Newsletters
Hot Issues
- Aged care report goes to the heart of Australia’s tax debate
- Removed super no longer protected from creditors: court
- ATO investigating 16.5k SMSFs over valuation compliance
- The 2025 Financial Year Tax & Super Changes You Need to Know!
- Investment and economic outlook, March 2024
- The compounding benefits from reinvesting dividends
- Three things to consider when switching your super
- Oldest Buildings in the World.
- Illegal access nets $637 million
- Trustee decisions are at their own discretion: expert
- Regular reviews and safekeeping of documents vital: expert
- Latest stats back up research into SMSF longevity and returns: educator
- Investment and economic outlook, February 2024
- Planning financially for a career break
- Could your SMSF do with more diversification?
- Countries producing the most solar power by gigawatt hours
- Labor tweaks stage 3 tax cuts to make room for ‘middle Australia’
- Quarterly reporting regime means communication now paramount: expert
- Plan now to take advantage of 5-year carry forward rule: expert
- Why investors are firmly focused on interest rates
- Super literacy low for cash-strapped
- Four timeless principles for investing success
- Investment and economic outlook, January 2024
- Wheat Production by Country
- Time to start planning for stage 3 tax cuts: technical manager
- Millions of Australians lose by leaving savings in default MySuper funds
- Vanguard economic and market outlook for 2024: A return to sound money
- An investment year of ups and downs
Article archive
- January - March 2024
- October - December 2023
- July - September 2023
- April - June 2023
- January - March 2023
- October - December 2022
- July - September 2022
- April - June 2022
- January - March 2022
- October - December 2021
- July - September 2021
- April - June 2021
- January - March 2021
- October - December 2020
- July - September 2020
- April - June 2020
- January - March 2020
- October - December 2019
- July - September 2019
- April - June 2019
- January - March 2019
- October - December 2018
- July - September 2018
- April - June 2018
- January - March 2018
- October - December 2017
- July - September 2017
- April - June 2017
- January - March 2017
- October - December 2016
- July - September 2016
- April - June 2016
- January - March 2016
- October - December 2015
- July - September 2015
- April - June 2015