Understanding the demographics for SMSF trustees
Picture a typical SMSF trustee. Who do you see? Everybody has their own idea of the typical Australian who wants to manage their own wealth - but that can lead to some dangerous assumptions about the attitudes and desires of your clients.
Let's break down some of the typical (and not so typical) demographics you'll find across Australian SMSFs.
Are SMSFs popular?
Our trusty self-managed super funds are well and truly on the rise. Thirteen per cent of Australians claimed to be a member of an SMSF in March 2017, according to ASIC. This is an increase on previous years, which remained stable around 10 per cent.
Are SMSFs only for the rich?
SMSFs are not at all limited to the wealthy.
Short answer: not at all. Only 24.2 per cent of trustees are known to earn an income greater of $100,000 p.a. or greater, according to the ATO. Meanwhile, the same research shows a similar proportion (22.2 per cent) earn under $20,000 p.a.
So, we can see that SMSFs are not at all limited to the wealthy - with under $20k earners being the most populated income band. This is in line with findings from ASIC, which show a 5 per cent increase to the number of non-professionals owning SMSFs.
Do young people use SMSFs?
When we look to the ATO's statistics for SMSF establishments, we can see that the majority of new SMSFs from the June 2017 quarter can be attributed to trustees under the age of 55 (67.9 per cent). That said, the majority of existing SMSF trustees remain to be aged over 55, and under 25s are - perhaps unsurprisingly - the least common trustees. Nonetheless, with 0.7 per cent of trustees being under 25 and 591,981 SMSFs (according to the Australian Prudential Regulation Authority), there were around 4,144 younger trustees as of June.
Where do SMSF trustees live?
New South Wales is the most popular state for SMSFs - being home to between 32 and 35 per cent of all funds, members and assets, according to the ATO. Meanwhile, the Northern Territory is by far the least popular - trustees here do not represent even 1 per cent of funds.
Right here in South Australia, we get by as a steady 7 per cent of all funds, members and assets.
Do men save more than women?
Statistics from the ATO show that the gender gap in SMSFs is closing.
With the wage gap still at 15.3 per cent (according to the Workplace Gender Equality Agency), SMSF balances continue to weigh in favour of men. However, statistics from the ATO show that the gender gap in SMSFs is closing - in terms of sector population, men represent 52.6 per cent of trustees, only 5.2 per cent more than women.
While SMSF statistics for savings by gender demographic aren't available, Roy Morgan has shown that the super balances of women have increased from 55.2 per cent of the average male balance, to 60.9 per cent.
Do trustees like their SMSFs?
Historically, presently and overwhelmingly yes! Across numerous studies, Roy Morgan has found that satisfaction with SMSFs is much higher than that of retail, industry or public super funds. The higher satisfaction has been attributed to trustees' ability to have greater involvement in their investments and adapt to market movements.
Understanding who your clients are will help you design the advice you give them - and it helps us to navigate your audits. At Audit your Superfund, we work face to face with you to discuss and resolve compliance issues in your clients' SMSFs with humanistic compassion. Get in touch with us today to organise your audits.