Industry funds outflows to SMSFs double

Mike Taylor

Managing Editor and Publisher

30 May 2024

There has been a doubling in outflows from industry funds to self-managed superannuation funds over the past two years, according to new analysis from WealthData.

As well, the WealthData analysis points to retail superannuation funds narrowing the long-standing performance gap with industry funds.

The analysis is based on the latest quarterly superannuation data provided by the Australian Prudential Regulation Authority (APRA) together with that from the Australian Bureau of Statistics and the Australian Taxation Office (ATO).

According to WealthData principal, Colin Williams, after a period of restricted transfers out to SMSFs from APRA-regulated funds, the latest data has pointed to a steady increase in transfers.

“The flow out to SMSFs has essentially doubled since Q1 2022, driven largely by increased losses at Industry funds,” he said.

The WealthData analysis also pointed to SMSFs continuing to hold market share, accounting for around 25% of total super assets, while industry funds retain market dominance with 34.9% albeit that retail funds have grown marginally from 20% to 20.3% market share.

Williams also pointed to industry funds beginning to feel the weight of outflows, with benefit payments in the form of pensions having more than doubled from $1.49 billion in the first quarter of 2020 to $3.07 billion in the March quarter.

He said that, by contrast, retail funds had experienced a more stable trend, increasing from $3.09 billion to $3.8 billion.

The WealthData analysis coincides with that contained in the Investment Trends 2024 Super Member Engagement Report which confirmed that member engagement remained highest for members with balances of over $250,000.

“Member engagement with their super fund continues to increase, as many more look to take matters into their own hands when it comes to retirement planning,” Ludovic Sevestre, Associate Research Director at Investment Trends said. “Our data also reveals that the more interactions non-retirees have had with their super fund over the past year, the more likely they are to start thinking about retirement.”