subscribe to our newsletter
Retail fund sector to trump SMSFs

Retail fund sector to trump SMSFs

Katarina Taurian
24 September 2013

The total retail fund sector will take over from SMSFs as the largest market segment in 2019, according to new research from Deloitte.

The retail fund sector, including retail employer-sponsored and retail personal, is projected to trump the SMSF sector and reach approximately $2.5 trillion in assets in the next 20 years, according to the Deloitte report, Dynamics of the Australian Superannuation System: The next 20 years: 2011-2033.

Growth is also projected for industry funds, with their rate of growth expected to equal that of SMSFs over the period to 2033, reaching $1.93 trillion.

The report also found that growth in the SMSF market has slowed, partly due to a reduction in concessional contribution limits.

In addition, product innovation both within industry and within retail funds has acted to “blunt the advantages” of SMSFs in accumulation phase, the report stated.

“However, SMSFs are still expected to be the largest sector by far in the post-retirement superannuation market, reaching $800 billion in 2032 and eclipsing the retail personal segment in 2017,” said Deloitte super leader Russell Mason.

The report indicated the different behaviours of super members in pre- and post-retirement stages, with SMSFs being “the home of choice” for those retiring with significant super balances.

“Industry [and retail] funds have struggled to retain and attract post-retirees,” Wayne Walker, Deloitte Actuaries and Consultants partner, told a media briefing yesterday.

“Both have failed to stem the growth of SMSFs. Post-retirement is all about SMSFs, they’re the vehicle of choice for… tax reasons, estate reasons, psychological reasons, and people wanting to control their investments,” he said.

“The big issue for institutional funds and I include industry funds… is [deciphering] how they can better compete with the value that SMSFs are seen to deliver.”

The report also found Australia’s superannuation asset pool is projected to reach $7.6 trillion in the next 20 years, equating to 180 per cent of gross domestic product.

Retail fund sector to trump SMSFs
smsfadviser logo
join the discussion

What do you plan to do in response to the new adviser education standards?

SUBSCRIBE TO THE
SMSF ADVISER BULLETIN

Get the latest news and opinions delivered to your inbox each morning

In this month's issue:

  • Time wrap
  • The tech bull run
  • From hobby to passion
  • Golden Years
  • An untimely reminder
  • Why change is so difficult
  • Key Strategies for equalising super