SMSFs predicted to have peaked

Segment to fall in the coming years

By Darin Tyson-Chan
Fri 12 Dec 2008

An actuarial report suggests the SMSF sector has already peaked.

The latest Rice Warner Superannuation Market Projections Report has predicted the market segment occupied by self managed superannuation funds (SMSFs) is set to decline over the coming 15 years.

SMSFs currently make up 30.9 per cent of the superannuation market, with total assets of $363 billion under their control. However, Rice Warner forecast this to fall to 26 per cent in 15 years time.

"We know the government is going to make changes as it is having a review of that market and that is likely to happen within months," Rice Warner director Michael Rice said.

"We think they are worried about the different regulation between the ATO (Australian Taxation Office) and APRA (Australian Prudential Regulation Authority)."

He said it is unlikely that the government will make an announcement that promotes further sales of these products.

"Also, when the retail sector has been really smashed, they are going to become innovative to recover market share and the SMSF segment ... is the natural home for the commercial sector," Rice said.

Another key prediction in the report is the further rationalisation of the industry. At the moment there are 514 corporate, industry, public sector and retail funds, and the actuarial firm has predicted this will drop to 220 by June 2013.

The report identified the corporate fund sector as the one to suffer the greatest fall in numbers, going from 228 currently to 60 by June, 2013.

Another key prediction Rice Warner made was a rise in the number of not-for-profit-funds from 13 today to 30 in 2013.

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