Overall, 32,747 SMSFs were established – the largest quarterly establishment rate since the 2016–2017 financial year. This was the year before the Morrison government introduced the Treasury Laws Amendment (Fair and Sustainable Superannuation) Regulations 2017.

Why are younger Australians establishing SMSFs?

There are several factors at play here. First, technology has evolved rapidly over the last few years, making SMSFs easier to establish, quicker to report on investments and cheaper to administer. With so many financial education resources available, many young investors prefer managing their finances, often in conjunction with bespoke advice.

Second, many younger generations want greater investment flexibility, transparency, control, and higher levels of engagement with their superannuation savings. An SMSF is a great way to achieve these things for these ‘hands-on’ individuals.

Many have had superannuation guarantee contributions their whole working lives and thus built a bigger superannuation balance than those of a similar age a generation ago. With SMSFs becoming more cost-competitive every year, younger Australians have greater empowerment to exercise more control over their retirement decision-making when compared to previous generations.

SMSF wind-ups also down

The ATO data also provided some surprising results regarding SMSF wind-ups. Historically, ATO data shows SMSF wind-ups tend to peak in June, with non-compliance being the most cited reason for closures, followed by concerns over investment returns.

June 2024 wind-ups were significantly less than June 2023 (2,954 versus 11,001); although the June quarter wind-up number does tend to increase over time largely due to late lodgments of SMSF annual returns.

The lower figure could also be a result of greater education and ATO enforcement, ensuring newly minted SMSF trustees understand the compliance responsibilities that go with the role.

SMSFs by the numbers

The ATO data shows 625,609 SMSFs in Australia, up from 598,564 in the June 2023 quarter.

There are now 1,152,792 SMSF members, up from 1,143,528.74 in the March 2024 quarter.

The total estimated net assets of SMSFs are $957 billion, up from $952 billion in the March 2024 quarter. Total borrowings by SMSFs, including limited recourse borrowing arrangements (LRBAs), only increased to $24.6 billion from $24.5 billion the previous quarter. The borrowing figure also includes permissible temporary borrowings, such as borrowing money for a maximum of 90 days to meet benefit payments due and required to be made to members, and borrowing money for a maximum of seven days to cover the settlement of certain security transactions.

Other statistics that provide interesting reading:

• SMSFs only hold $1.5 billion in crypto assets.
• The top asset classes are listed shares ($277 billion), and cash and term deposits ($162 billion).
• Whilst younger generations are establishing SMSFs, 51.5 per cent of all SMSF members are 60 or over.

You can read the SMSF quarterly statistical reports on the ATO website:

https://data.gov.au/data/dataset/self-managed-superannuation-funds.