Why industry funds are uncomfortable with SMSF drift

Mike Taylor

Managing Editor and Publisher

18 June 2026

Industry superannuation funds are increasingly losing members via self-managed superannuation fund (SMSF) establishments, according to the latest analysis of Australian Taxation Office (ATO) data by Padua’s WealthData.

WealthData has pointed to the almost record rate of new SMSF establishments over the 12 months to March, this year, noting that both funds and members have grown every quarter and the rate of growth as clearly stepped up since 2022.

But, importantly, the analysis points to an increasing amount of money drifting away from industry funds to SMSFs.

It said the rolling annual net transfer from Industry Funds to SMSFs has climbed to $7.76 billion (year to March 2026), up from $7.21 billion at December 2025. A few years ago (year to Q1 2022) that figure was only around $0.88 billion.

The analysis noted that the single March 2026 quarter saw Industry Funds shed a net $1.91 billion to SMSFs.

“While that eases off the back-to-back records of $2.21 billion and $2.17 billion in the prior two quarters, it is well above the $1.35 billion recorded in the same quarter last year and the $0.94 billion in the March 2024 quarter,” it said.

WealthData said retail funds had also lost money to SMSFs but on a smaller scale – $0.64 billion in the quarter and $2.50 billion on a rolling annual basis.

The analysis said that the drift of money from large, APRA-regulated funds represented the engine room behind much of the new SMSF establishment activity.

“The data clearly show that more Australians are choosing to take direct control of their retirement savings,” it said.

The analysis said the demographic profile of the sector remains tilted toward established, higher-earning members, while new entrants skew younger:

• New funds established this quarter are concentrated in the 35–44 age group, the single largest band for new establishments.
• Across total membership, the 75–84 age group holds the highest share of all SMSF individuals, and a significant proportion of funds have at least one member aged 65 or over — contributing to the drawdown and retirement-phase activity noted above.
• Membership remains weighted toward males (approximately 53%) versus females (approximately 47%), with males making up a higher proportion of both total and new members.

This combination of younger entrants establishing funds while an older cohort moves into drawdown.