APRA Super Fund Analysis Plus SMSF and Adviser Data
APRA released their latest super funds data earlier this month for the December quarter, 2023. We have delved into the details and added some of our financial adviser data and population figures from the ABS, plus SMSF data. The analysis below aims to highlight some of the important movements that may affect advice businesses, including the opportunity of improvement for advisers.
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You may also wish to see our detailed analysis of SMSF Funds, which also includes an overlay of Advisers - See blog post here
In summary - Industry Funds continue to dominate in terms of assets and flows. This last quarter, Retail Funds steadied and had a few positives, including a better investment return over the quarter and closed the gap on five-year returns.
The opportunity for advisers continues to grow, as both assets and the broader Australian population continues to grow. The data also shows that over recent quarters, there has been a steady upturn in super benefits being withdrawn and is now close to the level last seen during the Covid era.
Below we highlight key dashboards and summary of the events.
D1 - Opportunity for advisers - Total super assets divided by the number of advisers comes in at $226 Mil per adviser, compared to $217 last quarter. Back at the end of Q4, 2018 it was only $88 Mil per adviser. The opportunity has increased by a massive 257% since Q4, 2018.
Much of the opportunity (per adviser) since 2018 has been driven by a sharp reduction in advisers. Over the last quarter, the main change was improved investment returns, driving up super assets - see D3
D1 - Total assets by population - The level of super per head of population (not members), has moved up to $131,323 from $126,929. The change was effected by market gains.
D2 - SMSFs as a share of total super assets still hovering at around 25% - SMSFs have consistently hovered at around 25% of all super assets, coming in this quarter at 24.8%, a slight dip from 24.9% last quarter.
D2 - Industry Funds are out in front 34.9% of total assets - Industry funds continue to dominate market share, most recently as a result of ‘eating up’ public funds and stronger ‘net flows’ than the other fund types. See also D5 Net Contributions.
D2 - Net asset movement over 12 months (rounded to nearest $1 BIL). Industry funds have grown by $161 Bil to be at $1,233 Bil. Retail up by $52 Bil to be at $709 Bil and SMSF by $56 BIL to be at $878 Bil
D3 - Retail Funds bounce back with investment returns - Over the quarter, retail funds were at 4.8% outdoing Industry Funds at 4.1%. Over the five years, Retail Funds have closed the gap to a variance of 1%, to be at 6.1% versus industry Funds at 7.1%. Back in Q4, 2021 the gap was 1.7%. (8.7% versus 7.0%).
D4 - Net Assets and Entities - The number of entities remained the same across the major funds. Industry funds. However, the average Industry Fund entity now holds $56.1 Bil, Retail funds are at an average of $10.7 Bil. To put it another way, the average Industry fund is more than five times larger than the average Retail Fund.
D5 - Net Contributions - For the quarter, the net contributions dipped compared to the previous December quarter, coming in at $12.68 Bil versus $$13.10 Bil. However, on a rolling 12 months, the reduction was more pronounced with total net contributions at $57.74 versus $64.06. Much of this is due to a higher rate of benefits being paid out, see D6 below.
D6 - Benefit Payments - Following on from D5 above, the benefits paid out reached $111.08 Bil over 2023 versus $91.43 Bil in 2022. The benefits paid out over the 12 months are just shy of the record set during Covid at $112.96 Bil.
D7 - Net Transfers and SMSFs Specific Transfers - After a period of APRA based funds restricting the flow of transfers out to SMSFs, the current data shows a steady increase of transfers to SMSFs. Since Q1 2022 (rolling 12 months), the flow out to SMSFs has basically doubled from (-$2.643) Bil to (-$5.236)
D8 + 9 - Investment - Assets Allocations - Note: APRA did not provide data for the last quarter, it will be updated in April 2024. New standards to apply to the reporting. However, the data back to Q3, 2023 clearly shows Industry Funds with a big appetite for holding investment directly, and a growing preference to assets such as infrastructure and property when compared to Retail Funds.
D10 - Fees as a % of total assets continue to fall - Industry Funds still hold an advantage of lower fees compared to Retail Funds. The gap on a rolling 12 month basis has remained stable over recent years.
Net Transfers to SMSF Funds - Rolling 12 Months
