Millennials driving SMSF establishments

Self-managed superannuation funds now account for more than a quarter (25.1%) of the Australian superannuation industry, according to the latest Benchmark Report from specialist administration software provider, Class Super.

The same report has also revealed that after decades of dominance by baby boomers, it is now Millennials and Generation X who are driving SMSF establishment.

However nearly three-quarters of the SMSFs were unadvised.

The Benchmark Report, released at this week’s SMSF Association national conference, revealed Generation X (51.9%) and Millennials (33.6%) collectively drove more than 85% of new fund establishments for the six months to 31 December 2024, as total value of net assets administered on Class grew by 9.2% to $355.9 Billion across 184,830 SMSFs and 345,570 members.

Class chief executive, Tim Steele said the report was drawn from analysis of data from Class SMSFs for the first half of FY25.

He said it was pleasing to see that the sector continues to grow and maintain its resilience.

“Interestingly, we’ve seen a spike in Millennial establishments which grew at a faster rate than any other demographic, increasing by almost 5% over the past six months to 37.3% (up from 32.6% as of 30 June 2024),” he said.

“In contrast, Generation X saw a slight decline from 60.97% to 60.34%, while Baby Boomers experienced a sharper drop from 21.17% to 15.75%.”

Steele confirmed the reach had indicated that 70% of SMSFs are unadvised as the gap between supply and demand for financial advice continues to grow.

“We also know the number of trustees accessing financial advice has stayed relatively stable over the past three years,” he said. “So, while accessing advice remains a challenge, increasing productivity for financial professionals through delivering innovative technology solutions presents a significant opportunity for the sector.”