The rise of the millennial self-managed superannuation fund investor augurs well for the future, presenting a potentially lucrative business proposition for financial advisers.
The latest CommSec SMSF Trading Trends Report shows millennials now represent the fastest growing segment within all active investors, with 50% of all new investors in the last 12 months being under 35 years of age. As a result, millennials now comprise a quarter of all active CommSec investors.
This aligns with the wider trend of the average SMSF member age falling from 48 to 44 years, which is perhaps further influenced by CommSec data showing the proportion of over-55s declining over the last five years while the proportion of 36 to 45 year old investors has seen the most growth in the same period.
"Given that most investors prefer to have a significant super balance before establishing an SMSF, the sector has traditionally been seen as the preserve of older investors - and it's true that SMSF traders are, on average, older than the average non-SMSF trader. Nevertheless, a new generation is beginning to make its presence felt," the report reads.
While the Australian Taxation Office predicts that millennials now represent 14% of the total SMSF population, CommSec's insights show those aged 51 to 65 years still account for the greatest number of SMSF investors - 42% of both members and total SMSF trading volumes. In addition, this group's trade amounts are about 50 times larger than those actioned by millennials.
Finally, despite the number of over 65s using CommSec having decreased, they still account for 37% of all active SMSF traders by number, compared to 16% of non-SMSF traders and 40% by value.
"They are also the most likely group to trade in parcels greater than $50,000, which represent 18% of their total trading. Overall, it seems that while they may have retired from work, they certainly haven't retired from trading," the report reads.