Self-managed super funds now account for 99 per cent of the number of super funds in Australia. Photo: Jessica ShapiroThe number of DIY super funds has ballooned 29 per cent in the past five years to hit 534,000 retirement saving vehicles with $557 billion in assets – making it the fastest growing segment of the superannuation market.
New data from the Australian Taxation Office found that self-managed super funds now account for 99 per cent of the number of super funds in Australia, with 30 per cent of the $1.9 trillion in super assets across the country.
“Over five years to 2012-13 contributions to SMSFs averaged $24.9 billion a year on behalf of 64 per cent of SMSF members,” ATO assistant commissioner Matthew Bambrick said.
“Notably, member contributions increased by 5 per cent and exceeded employer contributions by approximately three to one in 2013.” The ATO report showed that the vast majority of SMSFs were still in accumulation phases where Australians are pumping money into the vehicles to save for their retirement. However, over the last five years 7 per cent of DIY funds have switched into full pension phase.
DIY funds are often seen as a honey pot for advisers and accountants looking to woo sophisticated trustees’ fees.
Regulators are closely monitoring the investment habits and practices across the sector.
The Australian Securities and Investments Commission cancelled the registration of 440 SMSF auditors after they failed to meet competency standards. ASIC has also disqualified two DIY fund auditors.
“As the SMSF sector continues to grow in popularity with Australian investors, it is critical that SMSF auditors play their key gatekeeping role,” commissioner Greg Tanzer said. “ASIC will continue to administer the registration process to assure Australians that SMSF auditors at least meet base standards of competency and expertise.”