Super Funds Analysis At Fund Level Plus Adviser Data Sep 2023
APRA released their latest super funds data on earlier this month for September quarter, 2023. We have delved into the details and added some of our adviser data and population figures from the ABS. The analysis below aims to highlight some of the important movements that may affect advice business.
When we look back at the results over recent years, there is little doubt that Industry Funds are dominating the overall market and appear to be sitting in the best possible position to keep improving their market share. Just about every key metric seems to favour Industry Funds, while Retail Funds are really struggling. SMSFs remain consistent, but not growing at the same rate of Industry Funds.
Key Points from the APRA Data, including the Dashboards (e.g. D1 = dashboard 1) that you can view for more detail. The dashboards, which are dynamic, are held in the Members Lounge under ‘Super Funds APRA Level Review’. If you are not a member, join today. 50% discount is still current at the time of writing this post.
D1 - Opportunity for advisers - The total super assets divided by the number of advisers comes in at $217 mil per adviser, compared to $219 last quarter. Back at the start of 2019 it was only $88 mil per adviser. Comfortably more than doubling in less than 5 years. The same chart also shows that there are 1,7064 people per adviser. Back in 2019 it was only 900.
D1 - Total assets by population - The level of super per head of population (not members), has moved down slightly this quarter to $127,377, from $128,389. The peak was in Dec 2021 at $128,897.
D2 - SMSFs as a share of total super assets is at 25% - Has hovered between 25 and 27% since the records became available in 2017. However, dipping slightly over the last 4 quarters
D2 - Industry Funds are out in front 34.3% of total assets - after being in fourth position in 2017 at 21.8%. Most of their gains have come in recent years as they swallowed up some Public Funds and gained market share from Retail Funds post the Royal Commission. Meanwhile, retail funds are flattening at around 20% for the last few quarters.
D2 - Net asset movement over 12 months (rounded to nearest $1 BIL). Industry funds have grown by $94 BIL to be at $1,166 BIL. Retail up by $17 BIL and SMSFs up by $24 BIL.
D3 - Five-year returns favour Industry funds at 5.3% - This is a small drop from 5.8% over the last quarter. Retail funds are at 4.0%. Retail funds have lagged Industry funds by approx 1.3 to 1.9% over most quarters.
D4 - Net Assets and Entities - The number of entities remained the same across the major funds. Industry funds, the average entity now holds $53 BIL, Retail funds are at an average of $9.5 BIL per entity. 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 June quarter, which is normal. However, retail funds have been 'negative’ for the last 3 quarters and for this quarter down (-$4.12 BIL. The Industry funds were positive at $16.35 BIL.
D6 - Benefit Payments - Following on from D5 above, the payments coming out of Retail funds are proportionally much higher than Industry funds. In the last quarter, 0.82% of net assets were paid out by Industry funds, half of the retail funds rate at 1.61%
D7 - Net Transfers and SMSFs Specific Transfers - Retail funds were in the red as a total at (-$5.06 BIL) while Industry funds are up by $4.74 BIL. Retail funds net loss to SMSFs was (-$433 MIL), and Industry funds at (-$924 Mil). See chart below.
D8 + 10 - Investment - Assets Allocations - Industry funds continue to enjoy investing directly at 62% of all assets, while Retail funds are only at 11%. The mix of assets makes for interesting reading, with unlisted infrastructure very much a favourite with Industry funds
D9 - Fees as a % of total assets continue to fall - On a quarterly level, Industry Funds are at 0.121% and Retail Funds at 0.174%. On a rolling 12 months, Industry Funds are at 0.493% and Retail at 0.698%. Back in 2012, both were very similar, at 0.84% for Industry Funds and 0.85% for Retail. Scale may well be the driver, as highlighted in D4 Net Assets and Entities above.
Retail and Industry Funds - Net Transfers to SMSF Funds per Quarter
