In its report, Dynamics of the Australian Superannuation System, Deloitte predicted the retail fund segment will grow from its current market share of 26 percent in 2015 to 34 per cent in 2035, while the SMSF segment will see its market share fall from its current 34 per cent to 30 per cent in 2035.
According to the report, the retail fund sector is projected to reach $3 trillion in assets by 2034.
Deloitte Australia principal of superannuation consulting Diane Somerville said while SMSFs are expected to lose market share overall, they will continue to dominate the post-retirement space.
SMSF assets in the post-retirement phase are predicted to reach $900 billion in 2033 and eclipse the post-retirement retail segment by 2028.
Ms Somerville said this dominance by SMSFs in post-retirement could be the result of factors such as SMSFs offering greater control over superannuation and the ability to harness the greater flexibility of family-based accounts for those members with larger account balances in particular.
“The tax advantages available within an SMSF structure for those transitioning from pre-retirement to post-retirement in terms of savings on capital gains tax and the sale of assets is another key benefit of SMSFs,” she said.
“[However,] we note there is nothing in the way of retail and industry funds offering these same advantages to members, other than the ability of their systems and processes to make this work.”
This projection for SMSFs also relates to the fact that retail and industry fund members are expected to take out a significant proportion of benefits as lump sums which will have a dampening effect on the level of post-retirement assets in those funds.