Mr Baker said the noticeable trend, seen between 2004 and 2012, of market share for SMSFs and industry super funds rising, and that of retail funds falling, has begun to change in the past two years.
Outflows from collective super funds to SMSFs, Mr Baker said, appear to be flattening out for the first time since 2006 and that 2013 was a year of “notable competitive improvement for collective funds”.
“While there is a fairly constant stream of approximately 50,000 members per annum leaving collective funds for SMSFs, net inflows to the SMSF segment have contracted to around $10 billion per annum,” he said.
“There has been a recovery in member sentiment in collective funds, and collective fund net inflows have improved to $38 billion.”
Mr Baker said this has coincided with a period of investment outperformance for collective funds.
“SMSFs are heavily overweight Australian equities and cash relative to collective funds,” he said.
“Where you have wanted to be in the past couple of years has been global equities, where SMSFs are drastically underweight compared to collective funds.”
He said he does not expect this latest trend to be a permanent reversal, however, with the trend towards individualisation remaining strong across all industries.
“But there are more hints here of a competitive fire coming under control, albeit with much back-burning still to be done,” he said.
“It may be that we are looking at a topping out of SMSF market share around one-third of net super assets.”