“New Plan for Life research into assets and revenue flows at age-group levels identifies major potential opportunities in Insurance, Investments and Retirement Products,” said Rael Solomon, manager marketing and product development at Plan For Life.
SMSF Market Growth
Self-Managed Super Funds (SMSFs) continue to be a major growth component of the Australian Superannuation Market, with total net assets of $543 billion at end of June 2014, up from $127 billion in mid-2004. This is a compound growth rate of 15.6% p.a. over the period of just over 10 years. The number of SMSFs have also grown to 531,059 as at 30 June 2014 up from 271,515 in 2004. The effect of this growth has been to increase the average amount per fund to $1,022,490 in 2014, up from $467,750 in 2004.
Opportunities for Insurance
Analysis of member age data provides an estimate of Insured Lives as well as the potential amount of Life Insurance Cover that may be generated from this sector. Results show that 84% of SMSF members aged 18-64 years old do not have insurance. This is over 630,000 people.
Opportunities for Investment Products
Managed investments for SMSFs offered by Retail Fund Managers represents 9.7% of overall SMSF total funds. The fund growth rate of Managed SMSF was 20.3% over the 2013/14 year, whereas the overall SMSF total only rose by 7.9%. Of the leading companies, AMP enjoyed the highest growth of 46% and the next two managers, BT and Commonwealth, both with 11% growth rates over the year.
Opportunities for Retirement Products
Plan for Life research estimates a market of up to $291 billion for SMSF members who are drawing a retirement pension. In comparison, Retail Allocated Pension Funds sold by Fund Managers totalled $153 billion at 30 June 2014. The opportunity for Life Companies and Fund Managers to offer alternative Managed Allocated Pensions and Immediate Annuities to SMSF members is substantial.
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