SMSF FUM growth set to slow, new research shows

The growth in funds under management within SMSFs is expected to slow, with the rate of growth in outflows from SMSFs exceeding that of inflows, according to a research company.

A report by DEXX&R said benefit payment outflows from SMSFs amounting to $26 billion exceeded inflows of $24 billion to SMSFs for the first time in the 12 months to 2013.

The report stated that from June 2004 to June 2013 contribution flows into SMSFs increased at an annualised rate of 8 per cent per annum while the benefits paid from SMSFs rose 24 per cent.

The differential between inflows and outflows, according to the report, is expected to continue at current levels with the growth of total FUM held in both the accumulation phase and pension phase projected to increase from $557 billion at June 2014 to $856 billion in June 2024.

The report said the proportion of total retirement income held in SMSFs is set to decline from its share of 62 per cent at June 2014 to 50 per cent by June 2024.

As of June 2014 the report said SMSFs held $302 billion in funds in the pension draw-down phase.

This was well above the $144 billion in retail allocated pensions, the $10 billion held in annuities and the $28 billion held in industry fund pensions.

The report said while the proportion of overall funds held by SMSFs in the drawdown phase is expected to fall, the total amount of funds will still increase to an estimated $477 billion by 2024.

The share of FUM in the pension phase for retail allocated pensions and industry fund pensions will rise to 35 per cent and 13 per cent respectively.

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