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SMSF penetration on downward trend: Tria
Figures from the Australian Taxation Office (ATO) revealed net inflows into self-managed super funds were at their worst in 2013 since 2006, giving APRA funds reasons to be optimistic.
That is the view of Tria Investment Partners, which said net inflows in 2013 were $10.2 billion, down from $16 billion in 2012 and less than half of the $20-30 billion per annum in 2008-09.
Managing partner Andrew Baker said the inflows into SMSFs was still not a "burning platform" that required urgent action from APRA funds.
"But there's an ongoing smoke signal in the steady outflow of APRA fund members to SMSFs of about 60,000 per annum, pointing to enduring underlying issues around control and flexibility that APRA funds do need to address," he said.
To assess the "penetration" of SMSFs in APRA funds, Tria compared annual percentage change to SMSFs with annual investment return, using AustralianSuper as a benchmark.
It found transfer growth to SMSFs was considerably below investment returns in 2013, indicating the penetration rate had dropped, which could mean 2013 was a year of "competitive improvement".
This is in contrast to 2007-8 before the global financial crisis, when SMSFs were infiltrating into APRA funds.
But the advent of the GFC "choked" this off between 2009 and 2012 with transfer rates moving closer to investment returns and penetration rates stabilising. It still was not good news for APRA funds but things were improving.
Baker said the 2013 figures could just be a "blip", with the possibility that similar number of members moved to SMSFs in 2013 but with lower average balances (although this is still positive for net cash flows).
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