It’s official. The numbers of SMSF members has now topped one million, according to the Australian Taxation Office’s March 2014 SMSF statistical report.
The report shows the number of SMSF members at 1,006,975 – a net gain of 11,384 compared with the 31 December 2013 figure of 995,591. Over the past four years the number of members has increased 26.6% from 795,563 at 31 March 2010.
Over the same three-month period to 31 March 2014, the net establishment of SMSFs was 6374, taking the number of funds to 528,701. Over the four-year period net establishments have risen 26.5% from 417,862 at 31 March 2010.
The SMSF Professionals’ Association of Australia (SPAA) CEO Andrea Slattery says: “The number of trustees and members exceeding one million is an important milestone for the SMSF industry, clearly demonstrating that there is a growing number of people wanting to take direct responsibility for their retirement savings.
“It now compels everyone involved in the industry to ensure that these trustees and members have access to the best professional advice, and certainly SPAA is committed to this outcome.”
She says that although the figures show that while number of SMSF establishments continues to grow, the pace of growth is softening.
“SPAA is encouraged by this trend. It suggests that people are only opting for an SMSF after doing their due diligence and deciding whether an SMSF is the appropriate retirement savings vehicle for them. As such, SPAA believes this growth is sustainable over the longer term.”
The ATO statistics also show that investment in residential property rose 17.2% to $20.5 billion in the 12 months to 31 March 2014.
Although that represents solid growth, Slattery says it has to be put into context.
“Residential property still only represents 3.7% of total SMSF assets of $558.5 billion, and is still dwarfed by non-residential property assets at $68.4 billion or 12.2% of total assets.
“In addition, most of that growth occurred in the first nine months to 31 December 2013, and was starting to ease in the last quarter.
“It’s also interesting to note that limited recourse borrowing arrangements only increased 1.6% in the March quarter and now stand at $2761 million or 0.5% of all SMSF assets. Again SPAA would suggest this number illustrates that trustees and members are adopting a conservative approach to gearing.
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