The latest data released by the ATO indicates that SMSF leakage is not a “burning platform” requiring a drastic response, according to Tria managing partner Andrew Baker.
The data shows 2013 was the weakest year for net inflows into SMSFs since “at least” 2006, Mr Baker said.
In order to gauge the “penetration” of SMSFs within APRA funds, Tria compared the annual change in fund transfers to SMSFs with the annual investment return (using AustralianSuper as the benchmark).
The analysis shows that prior to the GFC in 2007 and 2008 SMSFs were increasing their penetration of APRA funds; between 2009 and 2012 the penetration was “choked off”; and in 2013 there were “hints of improvement”.
“[In 2013] growth in transfers to SMSFs was well under investment returns, suggesting that the rate of penetration had fallen.
“For APRA funds, the SMSF situation actually got better in 2013 for the first time since 2006,” Mr Baker said.
The finding should be cause for optimism for APRA funds competing with SMSFs, Mr Baker said.
“On our analysis, things have not been getting materially worse since 2009, with 2013 a year of competitive improvement,” he said.
But one year could be a “blip”, and APRA funds cannot take their eye off the threat posed by SMSFs, Mr Baker said.
“There’s an ongoing smoke signal in the steady outflow of APRA fund members to SMSFs of around 60,000 per annum, pointing to enduring underlying issues around control and flexibility that APRA funds do need to address,” he said.
