SMSF Sector Growth Continues: ATO Data Shows No Signs of Slowing Down

Rising SMSF Numbers Reflect Strong Investor Confidence

The latest ATO Self-Managed Super Fund (SMSF) quarterly statistical report for December 2024 has confirmed that the SMSF sector is continuing its strong growth, with nearly 9,000 new SMSFs established in the last quarter alone.

The total number of SMSFs now stands at 638,411, marking an increase of almost 20,000 funds since June 2024 (619,216). Similarly, SMSF membership has expanded to 1,184,287, up nearly 40,000 members from the previous quarter.

Fewer Exits as More SMSFs Remain Active in Retirement

The report also highlights a significant drop in SMSF wind-ups, suggesting that more Australians are maintaining their funds well into retirement. Only 217 funds exited the sector in December 2024, a stark contrast to the 1,183 exits recorded in December 2023.

This trend aligns with a 30% year-on-year decline in SMSF closures, as noted by industry experts. The average period for SMSFs from establishment to wind-up has also extended to 15.1 years, up from 13.8 years in 2022.

Younger Superannuants Driving SMSF Growth

Industry leaders attribute this continued expansion to younger superannuants seeking greater control, flexibility, and investment diversification.

“Much of this growth is being driven by younger superannuants looking for higher levels of control,” said Peter Burgess, CEO of the SMSF Association.

“While many SMSF trustees may be unadvised initially, they will gravitate toward advice over time as their circumstances change.”

With technological advancements making SMSF administration more streamlined, and opportunities for pooling resources increasing, younger investors are embracing the SMSF structure earlier than before.

Strong Investment Performance Fuels Member Confidence

One of the key factors driving lower exit rates and increased SMSF longevity is the strong investment performance within the sector.

The SMSF sector delivered a 10.1% total return on assets in 2023, significantly contributing to higher member satisfaction and fund stability.

According to Shelley Banton, Head of Technical for ASF Audits, reduced closures combined with higher returns suggest that SMSF members are gaining confidence in long-term wealth management strategies.

SMSF Sector Now Exceeds $1 Trillion in Assets

The total estimated assets of SMSFs have surpassed $1.02 trillion, marking a 6% increase within the sector.

The top asset classes held by SMSFs include:

Listed shares – 26% of total SMSF assets
Cash & term deposits – 17% of total SMSF assets

The average assets per SMSF fund now stand at $1,550,571, while the average assets per SMSF member have risen to $835,265.

Who’s Leading the SMSF Market?

The latest ATO data also revealed key demographics of SMSF trustees:

Two-member funds remain the most common structure, accounting for 68% of all SMSFs.
Male SMSF members make up 53%, while female participation has held steady at 47%.
85% of SMSF members are aged 45 years or older, reinforcing the importance of strategic retirement planning.

Maximise Your SMSF Strategy with Boa & Co.

As the SMSF sector continues to grow, it’s crucial to have the right tax planning and compliance strategies in place to optimise your fund’s performance. At Boa & Co. Chartered Accountants, we provide specialist SMSF advisory services, including: