Middle-to-higher incomes boosting SMSF growth
The SMSF sector experienced healthy growth over the March quarter, with men and women on middle-to-higher incomes driving an increase in new funds established, according to statistics released by the ATO.
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The SMSF quarterly fund statistics for March 2024 showed there were 7371 new funds established for the quarter and 272 wind-ups for a total growth figure of 7099 funds, with the total number of SMSFs now at 616,400 with more than 1.14 million members.
Notably, the ATO figures showed for women earning a median income of up to $60,000, fund establishments declined by 1.4 per cent compared to the previous quarter.
In contrast, fund establishments for women earning between $60,000 and $200,000 increased by 1.5 per cent. This was a reversal from last year when more women with lower incomes were setting up SMSFs.
For men earning up to $60,000, the establishment of new SMSFs decreased by 0.3 per cent compared to the previous quarter. However, for men earning between $60,000 and $200,000, there was a 2.1 per cent increase in the creation of new funds.
The ATO figures also indicated a slight increase in the proportion of men establishing SMSFs, with 55.7 per cent of new funds set up by males, while 44.3 per cent were set up by women. This marks a 0.5 per cent decrease in the proportion of women creating SMSFs and a corresponding increase for men compared to the previous quarter.
Men and women aged from 35 to 44 constituted the largest demographic driving new fund establishments, responsible for 36 per cent of the new SMSFs, up almost 2 per cent on the December quarter.
The location where funds were set up remained largely consistent with figures from the December quarter, with a slight increase in fund establishments in New South Wales (0.7 per cent), Western Australia (0.7 per cent) and South Australia (0.2 per cent).
According to the data, the level of cryptocurrencies held by SMSFs ($1.044 billion) continued to fall, reaching its lowest level since the March quarter 2021, declining by more than 35 per cent from a high point in the June quarter 2021 ($1.613 billion).
However, allocations to listed shares rose by over $12 billion on the December quarter from $258 billion to $270 billion, while limited recourse borrowing arrangements also experienced an uptick of $1.4 billion over the same period, or 2.3 per cent, from $61 billion to $63 billion.
May 23, 2024
Todd Wills
smsmagazine.com.au
Todd Wills
smsmagazine.com.au
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Heathmont Financial Services Pty Ltd (ABN 68 106 250 104) trading as Heathmont Financial Services is a Corporate Authorised Representative (No. 262098) of Knox Wealth Management Pty Ltd (ABN 74 630 256 227), Australian Financial Services Licence Number (AFSL) 513763.
Julian McGoldrick is an Authorised Representative (No. 262098) of Knox Wealth Management Pty Ltd AFSL 513763.