Tim Steele
Leading cloud-based accounting and SMSF administration software provider Class has released its 2026 Annual Benchmark Report, revealing new insights into rollover activity and indicating recent government reforms may have more impact than initially anticipated.
As at 30 June 2026, the number of SMSFs reached a record 680,301 funds and more than $1.107 trillion in assets. During FY26, 52,020 new SMSFs were established, the highest number added within a financial year on record. This growth was achieved against a backdrop of significant regulatory change including the commencement of Division 296, Payday Super and changes to Limited Recourse Borrowing Arrangements (LRBAs).[1]
This year, new findings reveal where SMSF rollovers are coming from and going to, highlighting the significant role member choice continues to play in shaping rollover activity across the sector. Between FY23 and FY26, $14.4 billion was rolled into Class SMSFs, around 2.5 times the $5.7 billion rolled out. Industry funds were the largest source of rollover inflows, accounting for 57.2%, while retail funds received 66.7% of rollover outflows.[2]
Class CEO Tim Steele said flexibility, choice and control are enduring features of SMSFs, with the data clearly demonstrating their important role within a competitive and diverse superannuation system. With SMSFs remaining in place for an average of 18 years in FY25, the data suggests many members continue to value the benefits the structure provides throughout their retirement journey.
“The findings show that different superannuation structures may play a role for members at different stages of life. Access to advice from financial professionals is critical to help clients make those decisions with confidence.”
1. Younger Australians with strong financial foundations drive growth
Gen X (aged 46-60) and Millennials (aged 31-45) continue to drive SMSF establishment activity, accounting for 89.1% of newly established funds.
The average and median age for all SMSF members was 62 in FY25. For newly established Class funds, the average member age was 47 in FY25 and FY26, while the average fund balances remained strong at $467,000 in FY25.[3]
2. Member choice shaping rollovers in and out of SMSF
Industry funds were the largest source of rollovers into SMSFs, contributing 57.2% of total value over the four-year period from FY23-FY26.
The rollover data suggests many members establish SMSFs with significant existing superannuation savings. Between FY23 and FY26, members consolidated an average of $267,000 through 1.5 rollovers, while newly established Class funds recorded an average balance of $467,000 in FY25.[4]
Meanwhile retail funds received 66.7% of rollover out value from SMSFs, with retail platforms often the preferred destination for members exiting the SMSF sector. This reinforces the ongoing importance of member choice and access to professional advice, to ensure individuals can choose the solution best aligned to their goals at each life stage.
Analysis of the 4,688 Class SMSFs wound up in FY25 found that more than half (51%) did not rollover to another superannuation fund, suggesting closures may be linked to members exiting the superannuation system through retirement, death benefit payments or other benefit withdrawals.
Meanwhile, among the wound up SMSFs that did transfer assets to another superannuation fund, retail platforms were the preferred destination, receiving 41.6% of wind-up rollovers.
3. New SMSFs drove the establishment of almost one in three residential LRBAs
Residential property continues to dominate SMSF borrowing activity, with new research revealing the extent of LRBA usage across the sector well before the Government announced restrictions to residential LRBAs in June this year.
In FY25, residential property represented 92.7% of Class SMSF LRBA holdings. The research found 3,672 new residential property LRBAs were established in FY25, up 46.8% from FY23, with almost one in three in newly established SMSFs and two-thirds from existing SMSFs.
Based on Class data, an estimated 11,500 new residential property LRBAs were established across the SMSF sector in FY25, compared with the ATO’s updated estimate of around 8,700 in FY24. These findings indicate that residential LRBA activity was higher than earlier estimates, meaning the legislated changes could have wider implications for industry providers supporting residential SMSF borrowers.[5]
4. Division 296’s reach extends beyond current members
The Benchmark Report found 72.8% of Class SMSFs have positive net unrealised Capital Gains Tax (CGT) positions as of 30 June 2026. Among SMSFs with at least one member balance above $3 million, the proportion with a positive net unrealised CGT position rises to 95.4%.[6]
This is particularly relevant under the Division 296 transitional CGT adjustment, which places greater focus on calculating unrealised capital gains and obtaining valuations for unlisted investments, including property.
The findings also suggest much of the impact is yet to be felt, with 8.8% of Class SMSFs with a member balance above the $3m threshold and a further 9.4% with member balances between $2m and $3m, creating a significant emerging cohort that may likely be affected in the future.
These changes reinforce the important role financial professionals play in helping clients navigate increasingly complex requirements including asset valuations, tracking dual cost bases, record-keeping and liquidity management.