SYDNEY – Friday 28 June 2013 – Industry funds are the incubators for SMSFs, a leading financial services lawyer says.
‘The future of super does seem to be between industry funds and SMSFs with industry funds acting as incubators for SMSFs,’ says Michael Hallinan special counsel superannuation Townsends Business & Corporate Lawyers.
Possibly the most significant market development in super over the last 20 years has been the relative decline of retail funds and the emergence of SMSF and industry funds, he says.
‘SMSFs are the most significant long-term threat to both retail and industry funds. This is clearly shown by the current advertising focus on SMSFs and by industry funds developing products which are intended to mimic SMSFs.’
APRA has estimated (as at 31 March 2013*) that the total value of superannuation assets is $1.58 trillion.
SMSFs are estimated to constitute 31.5 per cent of Australia’s superannuation assets, making SMSFs the largest superannuation sector. The other sectors, in descending order, are retail funds with 26.3 per cent, industry funds with 19.8 per cent, public sector funds with 15.7 per cent and corporate funds with 3.8 per cent. The missing 0.1 per cent is held by small APRA funds.
For the March 2013 quarter, all superannuation sectors experienced growth in assets. For industry funds, the growth was 5.7 per cent in super assets, SMSFs assets grew by 4.7 per cent with the other sectors having 4.3 per cent (public sector and the corporate sector) and 4.2 per cent (retail sector) growth.
By way of comparison, APRA estimated that the growth in the various sectors assets for the year to June 2012 was 6.6 per cent for industry funds, 5.7 per cent for public sector funds, 3.7 per cent for small super funds (SMSFs, single member ADFs and small APRA funds), 0.9 per cent for retail funds and negative 4.1 per cent for corporate funds.
* Sources: APRA Quarterly Superannuation Performance March 2013 (released 23 May 2013). Also APRA Annual Superannuation Bulletin June 2012 (issued 9 January 2013).
contact
Michael Hallinan special counsel superannuation
Townsends Business & Corporate Lawyers
02 8296 6222
michael@townsendslaw.com.au