The power of SMSFs was confirmed by March 2014 ATO data stating that Australia has notched up its one-millionth (“SMSF”) member. No longer can SMSF’s be considered a ‘fad’, it is most definitely real and its here to stay.
There are now 1,006,970 members in SMSFs with assets of $558 billion. There has been incredible growth of 26% over the last four years with over 11,400 members joined in the March quarter alone. These are the figures that see industry funds scratching their heads with concern. More and more Australian are turning to the ‘self-funded’ retirement option.
The Australian Securities and Investments Commission’s cost of operating SMSFs report last year, found SMSFs with balances of $200,000 or more will provide similar or more value to industry and retail funds if trustees undertook some of the administration. With the increased number of administrators in the SMSF market, costs are decreasing, removing the ‘minimum balance myth’. No longer do Australians believe they require a minimum balance of $200,000 to start a SMSF, providing further impetus for the SMSF market, particularly borrowing to invest in property which has seen all the major bank promoting an SMSF lending product for residential and commercial market. This will ensure the SMSF market will continue to grow in the future.
After all, compulsory superannuation is here to stay and Australian’s will start thinking about securing their retirement nest egg from a younger age – a SMSF will be seen as the best option.
If you have a question in regards to setting up a SMSF, please give Redwood Advisory a call on 1300 790 110.
Ivan Filipovic is a Director Redwood Advisory- SMSF Specialists.
The content has been prepared without taking account of the objectives, financial situation or needs of a particular individual and does not constitute financial product advice.
