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Dr. Mark Sinclair
Dr. Mark Sinclair, Mentor Education

SMSFs growing and well managed – a worrying sign for the banks?

27 September 2013

In a concerning signs for the big four banks and despite ASIC’s recent crackdown on self-managed super funds the growth of SMSF’s seem to be growing significantly with total funds under management in SMSFs reaching $500 billion at June 30.

Not only does the trend in SMSF seem to show no sign of simmering  there is overwhelming evidence suggesting that the majority of those choosing to take control of the management of their savings are more than competent in doing so. The latest SMSF asset allocation numbers published by the Australian Tax Office show that trustees are choosing to put their money in non-traditional places not offered by many professional service providers with SMSF trustees showing a proclivity toward more bold decision-making.

The analysis of SMSFs by Rice Warner actuaries published recently by ASIC commissioner Peter Kell shows that the SMSFs who have investing in adventurous products such as overseas residential property, collectables and using non-recourse lending have consistently outpeformed the professionally managed funds over the longer term.

Rice Warner calculated the approximate average returns for the whole SMSF sector and compared that to the equivalent return for funds regulated by the Australian Prudential Regulation Authority and found that the SMSF sector had delivered higher returns than the APRA sector in six of the last seven years in both good and bad years.

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