What type of people have SMSFs?

The following table provides information on the income ranges of both male and female SMSF members.

Income and gender profile of SMSF members – all members

Income range	Total members	Male	Female
Less than $20,000	22.6%	19.7%	25.9%
$20,000 – $40,000	18.5%	16.2%	21.2%
$40,000 – $60,000	12.5%	11%	14.2%
$60,000 – $80,000	10.5%	10.4%	10.7%
$80,000 – $100,000	8.9%	9.4%	8.3%
$100,000 – $150,000	10.7%	12.9%	8.2%
$150,000 – $200,000	6.3%	7.7%	4.8%
$200,000 – $500,000	6.1%	8.2%	3.8%
More than $500,000	1.7%	2.5%	0.8%
Unknown	2.0%	2%	2%

Source: Australian Taxation Office

Significantly, the above table also highlights that the proportion of female SMSF members earning a taxable income of less than $80,000 is higher than the proportion of male SMSF members. It also reveals that the proportion of male SMSF members earning taxable incomes above $80,000 is higher.

New SMSF member income ranges are fairly evenly spread, as indicated in the table below.

Income profile of SMSF members – all members

Income range	Total members
Less than $20,000	10.4%
$20,000 – $40,000	13.4%
$40,000 – $60,000	14.7%
$60,000 – $80,000	13.7%
$80,000 – $100,000	12.9%
$100,000 – $150,000	16.2%
$150,000 – $200,000	8.3%
$200,000 – $500,000	6.6%
More than $500,000	1.5%
Unknown	2.4%

Source: Australian Taxation Office

Superannuation balances

The average account balance of all individual SMSF members according to the latest ATO statistics is $652,465. The table below shows that people in the 70-74 highest average account balances.

Age bracket	Average SMSF member balance
Under 25	$50,232
25-34	$80,165
35-44	$149,059
45-49	$242,642
50-54	$363,855
55-59	$574,409
60-64	$782,658
65-69	$909,823
70-74	$977,517
75-84	$1,014,838
85+	$893,180

Source: Australian Taxation Office

ATO figures further reveal that the average assets per member in the establishment year of an SMSF was $203,530 in 2016. This is consistent with the generally held view that the cost of setting up and running an SMSF may not be in the best interests of members with lower balances.

Locations

SMSFs are proportionally more popular in Victoria than any other Australian State or Territory. Although Victoria has 25% of Australia’s population, it has 31% of all SMSF members.

On the other hand, Queensland, Western Australia, Tasmania and the Northern Territory are under-represented in terms of SMSF members when compared to their respective shares of Australia’s total population.

The differences between SMSF members in the accumulation and retirement phases

The most recent ATO figures reveal that 47% of all SMSF members are currently in the retirement phase (previously known as the pension phase).

The majority of the SMSFs in Australia that are in the retirement phase have all of their members in this phase (i.e. no other members in the accumulation phase). It’s also important to note that the number of SMSFs moving into this phase has steadily increased over the past five years. This trend is expected to continue as a result of Australia’s ageing population.

According to a recent report by Class Super (an SMSF administration software company), the average age of an SMSF member in the retirement phase is 70, compared to 52 for accumulation phase members.

Class Super’s statistics also reveal that the average balance of older retirement phase members is higher than the average balance for accumulation members ($1,939,985 versus $772,947).

This larger balance finding is supported by ATO statistics showing that 69% of total SMSF assets are currently in the retirement phase, even though SMSFs in the retirement phase only represent just under half of the total number of all SMSFs in Australia.

Different types of SMSF members

The most common trait for those deciding to start or join an SMSF is having the motivation to choose and manage their own super investments. In 2017 CBA and the SMSF Association produced a report that broke down SMSF members into the following four investor profiles:

1. The Controller: This is the most common type of SMSF member. They want to have a high degree of control over the management of their fund and investment decision-making. They may seek professional advice, but they are also confident in their own ability to manage their SMSF, especially in relation to investment decisions.
2. The Self-Directed Investor: This type is less likely to seek professional advice in managing their fund or making investment decisions than a controller. They have a high level of confidence in their own abilities.
3. The Coach Seeker: Coach seekers take a moderately active role in managing their SMSF and making investment decisions. They seek professional guidance to help them, but don’t outsource completely.
4. The Outsourcer: This type of SMSF member prefers to almost totally outsource the day-to-day administration of their fund and investment decision-making to professionals that they hire.

The bottom line

The number of SMSFs in Australia has continued to rise in recent years, along with average individual member and overall fund balances. SMSF members are generally attracted by the freedom to choose and manage their own super investments. It’s important to understand that there can be significant costs and responsibilities involved with setting up and running an SMSF, so it’s important that the benefits outweigh the costs.

Learn more about whether an SMSF may be right for you.

You should seek independent professional advice based on your individual financial circumstances if you are considering setting up an SMSF. The information contained in this article is general in nature.