APRA Super Fund Analysis Plus SMSF and Adviser Data To March 31, 2024
APRA released their latest super funds data on May 28, 2024 for the March quarter, 2024. We have delved into the details and added some of our financial adviser data and population figures from the ABS, plus ATO SMSF data. The analysis below aims to highlight some of the important movements that may affect advice businesses, licensees and wealth firms. The dashboards for Members are dynamic allowing users to tailor the charts.
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Key Findings (With Dashboard Numbers Referenced):
Industry Funds Maintain Dominance, but Retail Funds Show Growth (D2): While Industry funds continue to expand, Retail funds experienced a solid quarter. Notably, Industry funds exhibit signs of reaching capacity limits regarding benefit payments, a factor that has hindered Retail fund growth in the past.
Retail Funds' Investment Returns Improve (D3): Retail funds have achieved two consecutive quarters of ‘out performance’ returns. This quarter investment return for Retail funds is 5.2% compared to Industry funds at 4.7%. This out performance is narrowing the five-year return gap with Industry funds. The gap, which was 1.7% in Q4 2021, has reduced to less than 1%, with Retail funds now yielding 5.9% compared to Industry funds' 6.8%.
Why the improved returns for Retail funds? Hard to know for sure. Most likely due to asset allocation - see 10 below.Growing Opportunity for Advisers(D1): The combination of asset growth and an expanding Australian population presents a growing opportunity for advisers. The total super assets per adviser have increased significantly since Q4 2018, from $88 million to $236 million in the recent quarter, representing a remarkable 268% increase.
Super Assets Per Head of Population Rise (D1): The level of super per head of the population (not members) has increased to $135,467 from $131,323, primarily driven by market gains for the quarter..
SMSFs Maintain Steady Share of Total Super Assets (D2): SMSFs continue to account for approximately 25% of total super assets, exhibiting stability in market share.
Industry Funds Lead with 34.9% of Total Assets (D2): Industry funds retain their dominant market share, largely attributed to absorbing public funds and stronger net flows compared to other fund types. Retail funds have shown marginal improvement, increasing from a low of 20% in Q3 2023 to 20.3% in the recent quarter.
Net Flows in the Past 12 Months (D5): Over the previous 12 months, Industry funds grew by $60 billion to reach $1,303 billion, while Retail funds expanded by $37 billion to reach $746 billion.
Pension Payments Steadily Growing for Industry Funds (D6): Benefit payments in the form of pensions have shown steady growth for Industry funds, more than doubling from $1.49 billion in Q1 2020 to $3.07 billion in the recent quarter. In contrast, Retail funds have experienced a more stable trend, increasing from $3.09 billion to $3.8 billion during the same period.
Transfers to SMSFs Show an Upward Trend (D7): After a period of restricted transfers out to SMSFs by APRA-based funds, the recent data reveals a steady increase in transfers to SMSFs. The flow out to SMSFs has essentially doubled since Q1 2022, driven largely by increased losses at Industry funds.
Investment Asset Allocations (Historical Data) (D8 & 9): Although APRA did not provide data for the last quarter, previous data (up to Q3 2023) indicates that Industry Funds have a strong preference for holding investments directly and an increasing appetite for assets like infrastructure and property compared to Retail Funds.
Fees as a Percentage of Total Assets Continue to Decline (D10): Industry Funds maintain an advantage over Retail Funds regarding lower fees. The gap on a rolling 12-month basis has remained stable in recent years, with Industry funds hovering around 0.49% and Retail funds at 0.70%..
Retail Funds - Closing The Gap For Investment Returns.
You may also wish to see our detailed analysis of SMSF Funds, which also includes an overlay of Advisers - See blog post here
