What to take from the latest ATO SMSF statistics

Last week saw the release the ATO’s SMSF quarterly statistics (September 2012) which again showed strong growth in fund establishments.  A further 8,183 new funds were setup in the first quarter of 2012-13 financial year, taking the number of SMSFs to 488,576.  Total assets grew to more than $458 billion, which now shows the average SMSF assets at $938,341.

Whilst the continued growth in numbers and dollars of SMSFs continues to be the main story, there were a couple of things I found in my analysis that I thought were interesting and worth highlighting:

Member numbers per fund

Average members per SMSF

Commonly referred to as “Mum and Dad” funds, we know that SMSFs typically operate with an average of just under two members (two member funds represent about 70% of all SMSFs).  With less than 4% of all SMSFs having three or four members, it is interesting to note that there were 2.27 members per fund established for the September 2012 quarter, well above the industry average (1.91 member per fund).  This higher than average number for September does not appear to be a ‘one-off’, as you can see from the above chart – on four occasions since 2008, the September quarter has had establishments where (on average) more than 2 members per fund exist.

Why is it the case?  Good question!!  What do you think?

Are SMSF trustees really switching to property?

Asset allocation percentages

There’s been a lot of talk about the growing interest in property within SMSFs… enough to raise the eyebrows of both ASIC and the ATO, ensuring that trustees are considering all the risks of property investment and the broader issues of the fund’s investment strategy.

The September 2012 quarterly statistics showed growth in property with:

  • Business Real Property (commercial) growing to more than $53 billion (9.45% increase over last 12 months); and
  • Residential property growing to $16.25 billion (9.45%  increase also over last 12 months)

Whilst showing signs of growth, these statistics do not appear to be showing any dramatic shift of trustees moving heavily into property.  In contrast the last 12 months has seen the total assets in listed shares grow by 19.6%, and is again the largest asset held within SMSFs by asset allocation ($141.5 billion).

The acquisition of property using limited recourse borrowing arrangements (LRBAs) also remains quite low statistically as the ‘derivatives and instalment warrants’ label represent only 0.34% of September 2012.  This would also include other forms of derivatives including options, warrants and similar instruments (NB.  ATO requires SMSF trustees to report LRBAs under the ‘derivatives’ label, now LRBA label for reporting purposes within the SMSF Annual Return).  Whether the reporting is done correctly or not, it must be questioned whether much of the property talk in SMSFs is just that… talk!

I’d be interested to hear your views about the latest SMSF statistics – where numbers are heading, what about asset allocations?

You can find out more about the ATO’s SMSF quarterly statistics here.


5 things about the March 2011 ATO SMSF statistics

The Australian Taxation Office (ATO) has recently released their quarterly statistics on Self Managed Super Funds.

Here are seven things that I’ve noted with the latest statistics:

  1. The average fund balance has grown to $965,931.  I wonder when the $1 million mark with be reached?
  2. More than 850,000 Australians as SMSF members for the first time, representing nearly 4% of the country’s population (22.6 million – per current ABS statistics);
  3. For the first time, the average member balance within a SMSF is in excess of half a million dollars – $506,494!!
  4. More than a quarter (25.4%) of all SMSFs established within the March quarter were setup by members between the ages of 35-44. This statistic is quite large when comparing to the overall age demographic within SMSFs (14.3%).  We are starting to see Gen X’ers starting to take a greater interest and control of their retirement savings.  By contrast, only 5% of new SMSFs were established by trustees aged 65 or over.  This compared to 20.6% of all SMSF members within in this age category; and
  5. There has continued to be a growing exposure to direct residential and commercial property within SMSFs over the past year (March 2010  to March 2011), with the asset allocation statistics showing an increase from 14.99% to 15.38%.  This percentage represents more $7.7 billion dollars in property acquisition through SMSFs over the past 12 months.  By way of comparison, there was no movement (in percentage terms) with cash and fixed interest, and a decrease in listed shares.
You can visit the Further information about these statistics can be found on the Australian Taxation Office website.
(C) The SMSF Academy 2012
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