The number of SMSFs in Australia surged to almost 600,000 after the strongest quarterly net establishment figures since September 2016 according to figures released by the Australian Tax Office.
After 6,525 establishments and only 272 windups in the quarter to June, the 6,253 net SMSFs established is the most since 6,916 (net) were established in 2016. The 272 windups are the least recorded in a quarter going back to mid-2016.
In a sign that the pandemic is increasing the allure of SMSFs, the total number of SMSFs in Australia is now 597,900, up from 574,775 at the same point last year. Approximately $822 billion is managed for 1.1 SMSF members in the country.
The ATO’s quarterly report on SMSFs provides a detailed historical snapshot of the sector.
Membership size, for example, has remained static with the largest portion, 69 per cent, being two-member funds for the last five years. Single-member funds have hovered around 23 per cent while three and four member founds have remained at three per cent each, though these figures are expected to change now that funds can have up to six members.
The location of funds has also stayed remarkably steady, with NSW having between 33.4 and 33.9 per cent of all SMSFs in the last five years and Victoria between 30 and 30.3 per cent.
Less people with a low range of assets are opening SMSFs in 2021, a likely result of more regulatory scrutiny on the appropriateness of recommending SMSFs to clients with low asset bases. While 19.9 per cent of SMSF members had less than $200,000 in assets back in FY15/16, the figure dropped to 14.2 per cent this year.
Average assets per member is $695,757 this year, up from $577,159 five years ago.
The number of funds with at least $5 million in funds also increased by 5,000 to roughly 20,000 in the past five years from 2.7 per cent to 3.6 per cent of all SMSFs.