The most recent SMSFs Under Advice report from the trading platform revealed increasing differences in asset allocation between advised SMSFs, self-directed SMSFs and non-SMSF investors.
Diversification across asset classes and sectors was found to be a hallmark of advised SMSF accounts, with the report revealing that advised SMSFs are more likely to have holdings in passive ETFs, active ETFs, LICs, LITs hybrids and AREITs than self-directed SMSFs.
Brett Grant, head of product, customer experience and marketing at AUSIEX, said the report identified “increasing allocation of advised SMSFs to exchange traded funds (ETFs) – in stark difference to self-directed SMSFs and non-SMSF retail accounts, both of which tend to prefer direct investments in equities”.
“Advised SMSFs also tend to be more diversified in terms of the number of unique securities held as well as sector allocations. For example, advised SMSF accounts held 15 securities on average, in comparison to 12 for self-directed SMSFs,” Grant said.
“The extent to which financial advisers can add value to their clients’ portfolios throughout the market cycle was again evident in this year’s analysis.”
The AUSIEX report also identified differences between generations, finding that advised Generation X SMSFs allocated significantly more to healthcare stocks than their self-directed counterparts and less to industrials.
“Advised Millennial SMSFs also allocated significantly more than their self-directed SMSF counterparts to healthcare, as well as industrials, real estate and consumer discretionary stocks,” Grant said.
Generation X and Millennials were also active on the new account front. The latter’s share of total new trading accounts jumped from 6.7 per cent to 9.8 per cent year on year as more people in this age group (29-44 years) reached the point at which they have sufficient assets to justify operating SMSFs.
The growing investing power of Millennials was also evident in the trading patterns of each generation. Millennials had the largest year-on-year increase in trading volumes (up 35.5 per cent) among advised accounts in 2024, compared with Generation X (20 per cent) and Baby Boomers (15 per cent).
“It appears evident that younger SMSFs investors may have different trading preferences to their parents, not just because of their stage of life but also due to their familiarity with securities such as exchange traded funds and even cryptocurrency,” Grant concluded.
