Slow but steady: SMSF growth continues

The flow of retirement savings from superannuation funds to the self-managed sector continues. But is the river drying up?

Rainmaker analysis of APRA data shows total net flows between APRA-regulated super funds and self-managed super funds has steadily decreased over the last three years.

According to Rainmaker, the SMSF sector is continuing to pick up funds from its industry and retail counterparts.

In 2016, $8.1 billion made its way into the self-managed sector, followed by $8.5 billion in 2017 and a further $8.6 billion last year.

Over the same period, the money flowing out of SMSFs has been modest - but it is increasing.

In 2016, just $1.4 billion left the self-managed sector. But last year, $2.7 billion of retirement savings headed out the door.

As a result, the net flows from large super funds to SMSFs are decreasing. In 2016, $6.7 billion flowed into SMSFs; last year just $5.8 billion moved across.

The analysis also shows more money moves both to and from the self-managed sector to retail funds.

As of last year, 56% of total flows to SMSFs came from retail super funds, while 58% of money leaving SMSFs landed in the retail sector.

This could explain why net flows to SMSFs are lower for not-for-profit super funds, which lost $2.6 billion overall to SMSFs last year. This is in comparison to the $3.2 billion that left their retail competitors.

Retail wealth groups made up six of the biggest groups impacted by outflows.

Wealth giant BT Financial Group was the hardest hit when it came to SMSF flows, losing about $1.045 billion to the SMSF sector. In the same period, BTFG gained just $120 million - a net loss of $925 million.

MLC lost $710 million; $600 million flowed out of AMP; while First State Super and AustralianSuper lost $340 million and $300 million respectively.

The top performing super fund was Macquarie Super, which was the only fund in the top 20 to register a positive net flow. Roughly $289 million joined the wealth manager's super offering from the SMSF community, while only $193 million left for a net result of about $96 million.

The most popular not-for-profit funds by inflows from SMSFs were AustSuper, UniSuper, HostPlus, QSuper and Cbus.

For context, Rainmaker analysis of ATO data shows SMSF establishments have halved over the last six years, to around 6000 per quarter. In 2012, quarterly SMSF establishments totalled 12,000.

Read more: RainmakerAustralianSuperBT Financial GroupCbusFirst State SuperHostPlusMacquarie SuperMLCQSuperUniSuper
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