Tim Steele

Leading corporate compliance and legal document provider NowInfinity, has announced a multi-year program of enhancements to deliver greater productivity for accountants, financial advisers and legal professionals.

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Tim Steele

Leading cloud-based accounting and Self-Managed Super Fund (SMSF) administration software provider Class has added certified commercial property valuations to its capabilities, delivering accountants comprehensive market valuation reports and rental assessments designed to meet audit needs.

This market leading capability has been introduced to ensure trustees are able to provide the ‘objective and supportable’ data required by the Australian Taxation Office (ATO) to accurately value property held within an SMSF.^[1]

Last year, the ATO identified property valuations within SMSFs as a critical compliance issue, revealing more than 16,500 properties had not been revalued for over three years, signalling an expectation for valuations to be current and reflect market conditions. ^[2]

According to the Class Annual Benchmark Report 2025, almost 30% of SMSFs on Class held direct property investments in FY25. Of these funds that held residential property, it on average represented half of the value of the fund.

The new commercial valuation feature provides access through PropTrack to independent, certified valuers assessments. It also enables retrospective valuations, streamlining a previously complex and often time-consuming task.

Valuations can be especially challenging for commercial properties, where rental yields and lease agreements are crucial to the process. The use of related-party real estate agents to provide valuations is increasingly regarded as non-compliant due to concerns around independence and potential conflicts of interest.¹

Class CEO Tim Steele commented commercial property valuations are a timely enhancement for accountants: “Class is continually listening to our clients and innovating to ensure they stay ahead of regulatory change. By removing friction that exists in current processes, we are enabling accountants and administrators to more efficiently service the needs of their clients.”

With the proposed Division 296 tax targeting high-balance SMSFs, accurate and secure valuations are more important than ever. Outdated property values could result in incorrect tax outcomes, making prompt and reliable valuations essential.

PropTrack’s Executive Manager of Product, Shelley Horton, said: “PropTrack valuations as a service solution provide accurate, up-to-date information, making the process smoother and more transparent. It gives SMSF trustees the tools to go beyond simply stating a property value by delivering a clear, well-documented process that meets ATO expectations, showing the data used, the valuation method, and any assumptions made.”

Through PropTrack, certified valuers provide desktop valuations within eight business hours and short-form valuations within 48 hours, providing clients with increased efficiency, improved accuracy, and compliance.

The introduction of integrated commercial property valuations will be released to all class customers this quarter and is part of Class’s program of enhancements to deliver efficiency for financial professionals.

It follows Class’s integration with Australia’s leading property data providers to offer direct access to residential property title searches and integrations with all four major Australian Share Registries.

———

Notes:
[1] ATO Guide to valuing SMSF Assets
[2] ATO targets property valuations in countdown to new $3m super tax

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Tim Steele

Leading cloud-based accounting and SMSF administration software provider Class has released its 2025 Annual Benchmark Report, highlighting record SMSF growth, increasing participation from younger generations, and the sector’s resilience despite regulatory uncertainty around the proposed Division 296 tax changes.

As at 30 June 2025, the number of SMSFs industry-wide reached a record 653,062, with total assets surpassing $1.05 trillion, underscoring the enduring appeal of SMSFs as a flexible solution for Australians seeking greater control of their retirement outcomes. In FY25, SMSF establishments increased to 6.4%, with approximately 42,000 new funds – the strongest growth since FY17.^[1]

Class CEO Tim Steele said the findings from the Benchmark Report showcase how strongly SMSFs are resonating with Australians.

“SMSFs continue to attract a broadening range of Australians who want flexibility, choice, and control in how they save for their retirement. This growth demonstrates the sector’s resilience and its ability to evolve in line with members’ needs, even as the regulatory landscape shifts.”

Benchmark Report data shows SMSFs are proving increasingly attractive to younger Australians. Generation X (45–59) led the way in FY25, accounting for 49.0% of new establishments, while Millennials (30–44) followed at 37.3%, reflecting their growing engagement with wealth creation and the flexibility SMSFs offer.^[2]

On Class, the average age of new SMSF members was 48 years, compared with 61.6 years for all SMSF members. At the same time, the average starting balance for new funds decreased by 29.4%, from $515,000 to $363,000, indicating SMSFs are becoming more accessible to Australians with more modest balances, and they are being established earlier in their journey towards retirement.^[2]

While younger Australians are increasingly establishing SMSFs, the report shows that older SMSF members are far more likely to transition from accumulation to retirement income streams than members of APRA-regulated funds.

Class SMSF members aged 60 to 64 are more than twice as likely to start either a Transition to Retirement Income Stream or Retirement Phase Income Stream than APRA fund members. With 93.0% of Class SMSF members over the age of 65 in retirement phase compared to just 49.2% of APRA fund members, and typically holding higher balances at this stage, the findings reinforce the need for strategic planning to maximise tax savings and retirement income.^[2]

SMSFs delivering and growing

The Benchmark Report shows SMSFs are delivering as a long-term solution for Australians. The average SMSF on Class has been established for 15.6 years in FY25, with 66% of funds operating for over a decade.

Currently, the average SMSF fund balance is almost $1.9 million, and the average member balance is $990,000, highlighting SMSFs as an effective solution for long-term wealth accumulation.^[2]

“SMSFs are not short-term experiments, they are a strategic solution for long-term wealth creation and increasingly are a cornerstone of retirement planning in Australia,” said Steele.

Division 296: A bigger tax impact than anticipated

The proposed Division 296 tax changes are expected to have a larger impact than previously estimated. Analysis of FY24 Class tax return data shows that approximately 18,200 Class members could be affected, each facing an average liability of $51,700.^[2]

This equates to a potential total tax liability of $940.9 million for Class members only, up from previous market data estimates of $825 million, indicating that SMSFs overall are likely to contribute significantly to the Government’s projected $2.3 billion in tax revenue during the first year.2

Given the S&P/ASX 200 increased by 10.2% during FY25, with one in four SMSFs holding more than 27.5% of their portfolio in domestic shares, a greater proportion of SMSFs could potentially exceed the $3 million threshold.2,4

Direct property remains popular; proposed Division 296 prompts closer review

Almost 30% of Class SMSFs held direct property investments in FY25, valued at approximately $74.0 billion. Property allocations decreased slightly in FY25, down 1.1% and the proportion of SMSFs that held property decreased by 0.9%. This could be due to trustees reducing exposure to direct property ahead of potential Division 296 changes.^[2]

The Benchmark Report identified 6.7% of SMSFs impacted by Division 296 as having insufficient liquidity to meet their liabilities, up from 5% in 2024. It is essential for trustees to maintain current property valuations to effectively plan for liquidity needs and meet the Australian Taxation Office’s increasing expectation that valuations accurately reflect prevailing market conditions.

Residential property remains dominant, accounting for around half of a fund’s assets, (whether held outright or with a Limited Recourse Borrowing Arrangement (LRBA)), versus about one-third for funds holding commercial property.^[2]

Around one in four property investments in Class SMSFs are funded through LRBAs, with about 92% of LRBAs tied to residential property. This could imply that SMSFs are being considered by younger Australians as a pathway into the housing market at a time when affordability remains a national challenge.^[2]

——–

Notes:
[1] ATO SMSF Quarterly Statistical Report June 2025
[2] Class Annual Benchmark Report – Built to last: Continued growth in a mature SMSF sector
[3] Superannuation in Australia: a timeline, APRA
[4] Stocks climb ‘wall of worry’ as ASX 200 gains 10 per cent over financial year 2025

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Tim Steele

Cloud-based accounting software provider Class has expanded its property compliance capabilities with enhancements that streamline valuations and title searches, improving efficiency and standardising processes for accountants and auditors.

Class has integrated with Australia’s leading property data providers – InfoTrack, CoreLogic, and PropTrack – to provide direct access to title searches, certificates, and automated property valuations, delivering accountants a comprehensive solution for property compliance to effectively support property assets held in SMSFs.

According to the Class Benchmark Report 2024, direct property accounts for 21% of Class SMSF assets, the second largest asset class by value after Australian listed shares. Additionally, almost one in three Class SMSFs (30.2% as at 30 June 2024) invest in direct property, with 63.6% of those invested in commercial property and 36.4% invested in residential property.

The Class property feature enhancements enable accountants to save on competitively priced title searches while also accessing historical valuations and nationwide reports that include sales comparisons and property dimensions, to deliver deeper insights for clients while also supporting auditors in their assessments.

The Australian Taxation Office (ATO) has previously issued audit guidance highlighting the importance of annual title searches to verify SMSF property ownership and to ensure that no charges (such as second mortgages or finance) exist over SMSF property assets.1

Additionally, a recent court ruling found council rates notices, bank loan statements, and rental statements were not sufficient to prove property ownership and that a title search is the only definitive way to verify property ownership.2

The newly released enhancements include:

• Expanded property title searches and certificates – Class now integrates with InfoTrack to enable nationwide property title searches and certificates, providing financial professionals with a faster and more reliable way to verify property ownership.
• Automated residential property valuations – Class has expanded its valuation capabilities beyond CoreLogic to also integrate with PropTrack to offer residential property valuations, now enhanced with retrospective valuation capabilities, directly from the Class platform.

According to Class CEO Tim Steele, these capabilities enable productivity by reducing manual processes and delivering accountants real-time access to trusted property data.

“Given resource costs and constraints, our clients rightfully continue to demand more from their technology partners. Class is committed to delivering innovative cloud-based solutions that simplify workflows, enhance compliance and deliver greater value for financial professionals.”

These enhancements follow the release of direct registry connections to Australia’s largest share registries and an industry-first, directly sourced document feeds from major financial institutions.

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Tim Steele

Leading cloud-based accounting and SMSF administration software provider Class today announced updated figures from its Benchmark Report revealing Generation X (51.9%) and Millennials (33.6%) collectively drove more than 85% of new fund establishments for the six months to 31 December 2024, as total value of net assets administered on Class grew by 9.2% to $355.9 Billion across 184,830 SMSFs and 345,570 members.^[1]

SMSFs now comprise more than one trillion (25.1%) of the $4.08 trillion superannuation industry.^[2]

Speaking at the SMSF Association National Conference in Melbourne, Class CEO Tim Steele said: “We undertook an analysis of data from Class SMSFs for the first half of FY25 which pleasingly shows the sector continues to grow and maintain its resilience. Interestingly, we’ve seen a spike in Millennial establishments which grew at a faster rate than any other demographic, increasing by 5% over the past six months to 33.6% (up from 28.5% as of 30 June 2024).

In contrast, Generation X saw a slight decline from 52.6% to 51.9%, while Baby Boomers experienced a sharper drop from 17.5% to 13.4%.^[3]

Jon Howie, Chief Executive Officer of Stake, an investment SMSF administration platform said: “As more Millennials become engaged in investing and increase their financial knowledge, we see demand for SMSFs continuing to grow within this demographic. In addition, continued innovation means the costs and complexity of SMSFs are being reduced, enabling new generations to take charge of their super.”

Growth opportunities for advice

Mr Steele said: “Data from the Class Benchmark Report has indicated that 70% of SMSFs are unadvised as the gap between supply and demand for financial advice continues to grow. We also know the number of trustees accessing financial advice has stayed relatively stable over the past three years.^[4]

“So, while accessing advice remains a challenge, increasing productivity for financial professionals through delivering innovative technology solutions presents a significant opportunity for the sector.”^[5]

For the 2022-2023 financial year, research commissioned by the SMSF Association into SMSF sector performance shows advised SMSF trustees tend to outperform non-advised funds by 7.6% compared to 6.4% (median rate of return).^[6]>

SMSF Association Chief Executive Officer Peter Burgess said these results underline the importance of making advice more accessible.

“The research found financial advisers play an important role in bolstering SMSF returns and helping trustees to avoid investment mistakes.”

Class product enhancements and future releases

Class continues to drive automation and efficiency for financial professionals with recent enhancements including share registry, document feeds, property valuation and title search:

• Enhanced share registry connections – Class now provides monthly holding balances and ownership verification for over 1,600 ASX-listed securities, supported through integrations with BoardRoom, Computershare, and MUFG Pension & Market Services (formerly Link Market Services).
• New property valuation and title search capability – Class has released new integrated property title search and title certificates, and an additional residential property valuation provider.

In the coming months, Class is set to introduce further enhancements, delivering productivity and greater efficiencies for financial professionals:

• New share registry connection – Class is in the final stages of establishing a connection with Automic, and when delivered will connect with all four major share registries to provide accountants and auditors with 99% share market coverage for over 2,100 ASX-listed companies.^[7]
• New integrated commercial property valuations.

———

Notes:
[1] Class Annual Benchmark Report Half Year Findings – in the six months to 31 December 2024
[2] APRA Sept Quarterly Statistics: https://www.apra.gov.au/news-and-publications/apra-releases-superannuation-statistics-for-september-2024
[3] Class Annual Benchmark Report Half Year Findings – in the six months to 31 December 2024
[4] Class Annual Benchmark Report 2024: Leading the way: SMSFs at the forefront of superannuation
[5] Ibid.
[6] University of Adelaide: Self-managed super fund performance 2022-2023, page 7
[7] Class is in the final stages of establishing a connection with Automic, subject to final approvals.

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Tim Steele

Leading cloud-based accounting and SMSF administration software provider Class has released the 2024 Annual Benchmark Report, revealing more than 16,500 Class SMSF members face being adversely impacted by the Government’s proposed Division 296 tax. Furthermore, over 36% percent hold direct property and are more likely to find it difficult to meet additional tax obligations on these illiquid assets.^[1]

The report also reveals while the number of SMSFs receiving advice has remained consistent over the past three years, more than 70% of SMSFs are not benefiting from access to professional financial advice, as the gap between the supply of financial advisers and the increasing demand for advice grows.^[2]

The SMSF sector continues to demonstrate resilience and growth despite macroeconomic challenges including the increasing cost of living, with Class data revealing that average balances for new funds have reached an all-time high while Gen-X are still driving the majority of new fund establishments.^[3]

In FY24, the average new fund establishment balance for Class SMSFs have reached an all-time high to more than $500,000, an increase of 9.2% since FY23.^[4]

Meanwhile, Generation X (52.9%) and Millennials (27.7%) collectively drove 80.6% of new fund establishments, as total SMSFs grew to 625,609 funds and $990.4 billion in assets. SMSFs now comprise 25.3% of the $3.9 trillion superannuation industry.^[5]

Class CEO Tim Steele said the Class Annual Benchmark Report analyses data from Class SMSFs to uncover key insights and trends shaping the future of the SMSF sector.

“As a leading provider of SMSF software solutions, we’re uniquely positioned to leverage data available through the Class platform and collaborate with industry leaders to deliver critical insights that empower financial service professionals and their clients to navigate the evolving landscape of SMSFs.”

Proposed Div 296 tax: $825.3 million tax liability for Class members

The report has revealed there are significant challenges for 16,531 high-balance members who collectively face $825.3 million in additional tax by the Government’s proposed Division 296 legislation.^[6]

Mr Steele said: “Our research shows the proposed tax could significantly challenge Class SMSFs with high balances, with Class members facing on average just under $50,000 in additional tax liability. This could particularly impact the 36% of affected SMSFs that hold direct property, making it challenging to manage tax obligations given the illiquid nature of these assets.^[7]

“For example, many small business owners and farmers could lose the incentive to transfer real business properties into SMSFs, making such strategies financially unviable. They may also find themselves with an even bigger tax bill with insufficient cash reserves to pay it.

“Furthermore, there are likely unintended consequences for younger generations if the $3 million-dollar super cap is not indexed and their super balances continue to grow, meaning there will be a lot more members impacted by the proposed tax in the future.”

Significant growth opportunity for advice

The report revealed 72.7% of SMSFs are not receiving financial advice, a figure which highlights the challenges many Australians face in accessing financial advice. The number of financial advisers declined by 5.7% in FY23, coinciding with a 4.7% increase in total SMSFs over the same period.^[8]
Mr Steele said: “While the number of funds being established is on the rise, we also know the number of trustees accessing financial advice has stayed relatively stable over the past three years.^[9]

“While advice accessibility is a challenge, improving productivity for financial professionals through ongoing investment in technology presents a significant opportunity. We’re also encouraged by the proposed legislative reforms which aim to improve access to financial advice.”^[10]

SMSFs lead in strategic retirement transitions

A comparison of statistics between APRA and Class members shows SMSFs are significantly more likely to be using their superannuation balances to provide a tax-effective retirement income.

Mr Steele said: “93% of Class members 65 and over have moved their balances into pension phase and are therefore more likely to be taking advantage of tax savings and maximising their retirement benefits.^[11]

“In contrast to APRA fund members, as of June 2023, only 48.8% of APRA members aged 65 years and over have transitioned to pension phase and are therefore more likely to be taking advantage of tax savings and maximising their retirement benefits.”^[12]

In FY23, Class SMSF members aged 60-64 were 2.7 times more likely to use Transition to Retirement Income Streams (TRIS) or Retirement Phase Income Streams (RPIS) than members of APRA-regulated funds. They also have higher average balances, with a greater percentage in the pension phase after 65.^[13]
“Financial advisers play an important role in helping clients make the transition to retirement and take full advantage of the proactive strategies available to them.”^[14]

Members aged 65+ continue to drive growth in non-concessional contributions

Older Australians 65 years and over (50.6%) are driving growth in non-concessional contributions in response to several factors including taking advantage of the removal of the work test, downsizing contributions, rebalancing strategies, the indexation of contribution caps, and accessing financial advice.^[15]

Mr Steele said: “Interestingly, non-concessional contributions for those aged between 40-65 years have decreased by 18%, possibly as a result of the current cost of living pressures.”

———–

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Tim Steele

Class has launched an enhancement to its trust accounting and administration software cloud solution, Class Trust, which automatically generates the new Australian Taxation Office (ATO) Trust Income Schedule (TIS), eliminating the need for manual entry and ensuring compliance with the latest trust reporting requirements.

As part of the ATO’s Modernisation of Trust Administration Systems project, new tax return changes effective from the 2023-24 income year require all beneficiaries who receive trust income from 1 July 2023 to lodge the new TIS with their tax return. The latest ATO figures show there are 947,264 trusts with assets of $2.3 trillion_. ¹

Class Trust enables accountants to auto complete and reconcile income distributed from trusts including unlisted trusts, listed securities, managed funds and stapled securities into the TIS, eliminating the need for manual entry.

According to Class CEO Tim Steele, this latest enhancement highlights the ability of Class Trust to support accountants to adapt to regulatory changes and efficiently manage the complexity of administering trusts.

“Class Trust is designed to provide accountants with an automated, streamlined and compliant TIS which simplifies the administration of trust entities at tax time while also reducing the complexities of reporting and lodgement requirements. Trusts are often in the spotlight and its critical accountants efficiently adapt to new regulations so they can continue to cost effectively deliver great client outcomes.”

Other features of Class Trust include:

• Automated Investment Tracking and Reconciliation: Save hours of manual entry with automated investment tracking and reconciliation, generating financial statements and tax reports on demand, customised to your firm’s needs.
• Standardised Administration Processes: Simplify trust administration through a standardised approach, regardless of which team member is preparing the accounts.
• Real-Time Distribution Decisions: Make distribution decisions before 30 June based on up-to-date information, accessing financial year-to-date income, franking credits, and capital gains at any time.
• Automated Tax Statements: Streamlined application of tax statement components to distribution income, dramatically reducing manual data entry and tax reconciliations preparation for lodgement and the ATO’s new Trust Income Schedule.
• Efficient Trust Distributions: Save time with automatic calculation of income components available for each beneficiary, including our powerful income streaming feature.
• Electronic Lodgement: Lodge tax returns electronically with the ATO, saving hours of manual data entry.

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Tim Steele

The SMSF sector will put itself under the microscope at the Thought Leadership Breakfast (TLB) being held on the opening morning of this year’s SMSF Association’s National Conference at the Brisbane Convention & Exhibition Centre from 21-23 February.

An expert four-member panel will examine the challenges facing the sector that include the potential for more regulatory intervention and the growing attention that APRA-regulated funds are giving to the de-accumulation phase of superannuation and longevity risk.

Session moderator Class CEO Tim Steele will be joined by panel members: SMSF Association CEO Peter Burgess, Heffron Consulting Managing Director Meg Heffron, KPMG Partner Linda Elkins, and Brighter Super CEO Kate Farrar, as they hold up a mirror to the SMSF sector and examine where its strengths lie and where it needs to “level up”.

Burgess says the TLB has become an important forum for the sector to take a close look at long-term issues and trends confronting SMSFs and the wider superannuation system and this year’s event will be no different.

“Over the past decade, we have witnessed APRA funds experience significant change, often driven by government intervention, such as performance benchmarking, additional statutory reporting, compulsory member communications, and mandatory retirement support.

“This intervention, which has been designed to improve the system by protecting member benefits and enhancing their outcomes, has largely bypassed our sector.

“But the question we now ask is this all about to change, and, if so, how?

“In the past we have often been immune to the changes in the broader superannuation sector, but has this been a fool’s paradise that puts our sector at risk of being left behind?

“Do we need to be more open-minded when it comes to regulatory intervention, or do we remain wedded to the status quo that has served us well in the past, understanding that APRA funds are rapidly changing, particular as they focus more on the pension phase, an issue where we have long been the industry leader?”

Burgess says the Association has deliberately sought input into the debate from an APRA fund – a first for the TLB – in the form of the Queensland-based Brighter Super that has more than 250,000 members and about $30 billion in funds under management (FUM).

“Up till now APRA funds have focussed on the accumulation phase. But as they turn their attention to the de-accumulation phase – a space we have traditionally dominated – with the prospect of mandatory retirement support for members looming, will the tables turn?

“Certainly, hearing the views of Brighter Super’s Farrar on these issues should be necessary listening from all conference delegates,” he says.

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Tim Steele

Leading cloud-based wealth accounting and SMSF administration software provider Class has today released the 2023 Annual Benchmark Report, revealing younger generations continue to drive new establishments whilst retirees are experiencing the benefits of remaining in SMSFs and taking advantage of tax-free earnings.^[1]

In FY23, Generation X (52.7%) and Millennials (23.7%) collectively drove 76.4% of new fund establishments, as total SMSFs grew to more than 610,000 funds and $880 billion in assets. SMSFs now comprise 25% of the $3.4 trillion superannuation industry.^[2]

The research also found average non-concessional contributions for Class members in FY22 rose by 28.1%, resulting from several factors including downsizing contributions, rebalancing strategies, the indexation of contribution caps, and the removal of the work test for people under the age of 67.^[3]

Class CEO Tim Steele said the Class Annual Benchmark report analyses the data behind the SMSF sector, providing key insights into the trends shaping the future of the industry.

“As a leading provider of SMSF software solutions, we’re in a unique position to leverage the data available through the Class platform and collaborate with industry leaders to deliver insights to help financial services professionals navigate the changing SMSF landscape and identify opportunities for their businesses and their clients.

“This year’s theme, with change comes opportunity, is reflective of an industry that continues to evolve, shaped by changing regulation and consumer needs.”

SMSF new establishments, growth and longevity

Mr Steele said: “Our data clearly shows an ongoing upward trend in SMSF establishments driven by both Generation X and Millennials indicating they are highly engaged in wealth accumulation and planning for a better retirement.

“They’re realising the many benefits that SMSFs offer including flexibility, investment choice and control, as well as the opportunity to become more engaged in their retirement outcomes. They’re also seeing SMSFs as a cost-effective investment solution.

“Interestingly, the data also shows members aged 75 and over are choosing to stay in SMSFs for longer.”

Benefits of tax-free earnings in retirement phase

A comparison of statistics from APRA and Class highlights that members of SMSFs are significantly more likely to be using their superannuation to provide a tax-effective retirement income.

Mr Steele said: “A high proportion of Class members (88%) 65 and over have moved their balances into pension phase and are therefore more likely to be taking advantage of tax savings and maximising their retirement benefits.^[4]

“In contrast to APRA fund members, as of June 2022, nearly half of all members (49%) aged 65 and over have their entire account in accumulation phase despite the fact that they are eligible to move into pension phase and access tax-free earnings.”^[5]

Proposed 15% tax on superannuation earnings for members with more than $3 million

As of 30 June 2023, 8% of SMSFs administered on Class have more than $3 million in super, approximately 1 in 4 of these funds hold direct property investments. Moreover, 80% of affected members are aged 65 and over.^[6]

Mr Steele said: “The current legislation limits people’s capacity to make both concessional and non-concessional superannuation contributions, so there is a natural ceiling that restricts the amount that you can invest within super.

“While the proposed legislation is forecast to impact 0.5% of superannuation members (80,000), if the $3m super cap is not indexed, then due to compounding, this could very likely impact future generations.”

New trend reveals reverse gender gap

The report also reveals for Class members a reverse trend whereby women under 25 years of age have 4.1% higher balances than their male counterparts.^[7]

Class General Manager of Growth Jo Hurley said: “For the first time, we looked at the gender gap over age range and, interestingly, we found the gender gap for women in their twenties was reversed. In fact, Class data for FY22 shows women at the start of their career have higher super balances than men.

“But once they reach the next age bracket, the trend reverses again where the gap is steep, and it becomes a real challenge to play catch up. That’s why it’s so important for women to start thinking about putting some simple yet effective strategies in place right away so that it becomes much easier to save for retirement.

“For example, if women were to begin making extra contributions into their super at the start of their career while they’re ahead, they’re more likely to benefit from a greater compounding effect of investment returns over time.

“It’s also important that people seek financial advice and preferably from an SMSF specialist, when establishing their own retirement fund to determine the most appropriate financial plan for their retirement objective.”

Top tips to help women grow super balances by Class General Manager, Growth Jo Hurley:

• Take advantage of opportunities to salary sacrifice or make voluntary after-tax contributions before and after taking any career break.
• Continue contributing to super during parental leave or career breaks where possible.
• Use the opportunity to catch-up concessional contributions when earnings are higher.
• Pay attention to investment performance/returns on a regular basis.
• Consider making a downsizer contribution when the time is right.
• Seek professional advice on rebalancing strategies.

————-

[1] Class Annual Benchmark Report: With Change Comes Opportunity
[2] 610,287 total funds (APRA Jun 30 Quarterly Statistics); 588,071 total funds (ATO March 31 Quarterly Statistics)
[3] Class Annual Benchmark Report: With Change Comes Opportunity
[4] Class Annual Benchmark Report: With Change Comes Opportunity, 1 in 8 (~12%) members aged 65+ have their entire balance in accumulation
[5] Refer to Australian Prudential Regulation Authority (APRA) 2023, Annual superannuation bulletin June 2015 to June 2022 (published on 31 January 2023), table 7d Membership Profile By Age And Members’ Benefit Bracket
https://www.apra.gov.au/annual-superannuation-bulletin
[6] Refer to Member age distribution of members having balances > $3m, page, 35
[7] Class Annual Benchmark Report: With Change Comes Opportunity

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Dr Irene Guiamatsia

The long-term outlook for self-managed super funds (SMSFs) is promising and exciting as an increasing number of younger people want to take control of their personal finances, the SMSF Association Thought Leadership Breakfast heard at its National Conference Yesterday.

The five-member panel, dissecting the topic How big can the SMSF sector BE? moderated by Class CEO Tim Steele, offered myriad reasons for the sector’s continuing growth, including individuals wanting to take personal control over their finances, asset allocation, and supply-side factors.

Investment Trends Head of Research, Dr Irene Guiamatsia, said: “Although the average age of SMSF members remains high at around 60 years of age, SMSFs are being established at a younger age, boding well for long-term growth.

“For this cohort, the main driver for growth remains the desire for control. Early exposure of Millennials and Gen Z to digitally delivered financial services reinforces control as an important component of their engagement with service providers. Also, Australians’ well-documented bias towards direct property as an asset class, and their desire to access it, helps stoke SMSF establishments.

“Supply side factors, such as low-cost initial setup, greater synergies between accountants and adviser practices and a slightly softer regulatory posture also play their role.”

Heffron Consulting Managing Director, Meg Heffron, said younger people will end up with larger balances at the same life stage than older generations and are more engaged – so the fact that SMSFs are perfectly suited to be someone’s ‘platform for life’ makes them well positioned for the future.

“And a strong SMSF sector is actually important for the whole super system.  SMSFs drive innovation that eventually trickles through to the broader superannuation space.  We only have to look at the great improvements retail funds have made when it comes to offering investment choices to see how competitive pressure from SMSFs improves super choices for everyone.”

SMSF Association Deputy CEO/Director of Policy & Education, Peter Burgess, said Association-commissioned research by the actuarial firm Rice Warner into costs, and the University of Adelaide into performance, have demonstrated the sector’s competitiveness on reaching the critical mass of $200,000 and this will hopefully be a key driver of growth.

“This research is already having an impact with ASIC releasing updated SMSF Advice materials late last year removing references to $500,000 as being the minimum recommended balance to start an SMSF.

“Ensuring SMSF members do the right thing is critically important and having access to quality SMSF advice is a big part of that.

“If we get this right the sector can achieve its full potential, but if we get it wrong we may see restrictions and conditions imposed that could stifle the growth of the sector.”

On the issue of whether a growing SMSF sector will be vulnerable, Professor Hazel Bateman of the University of NSW’s Business School of Risk & Actuarial Studies noted that financial literacy is poor across the entire population and that it declines at older ages. “Yet people tend to be over-confident of their abilities, with the data from the nationally representative HILDA (survey showing that self-perceived financial capability increases with age.

“Behavioural biases are also important. Procrastination might lead to some not adequately managing the SMSF they have established or using inappropriate metrics to measure its performance.

“Ensuring that SMSF members have access to appropriate advice is very important. It is important that the advice is good quality – related academic research shows how people are vulnerable to ‘first impressions’ and ‘confirmation bias’ and may stick with ‘ineffective advisers’.”

Steele concluded: “Today’s panel discussion and audience engagement demonstrates a sense of collaboration among industry participants to help shape the future of the SMSF industry and improve the retirement outcomes for more Australians.

“As an industry participant, Class will continue to innovate and invest in technology solutions that enhance business efficiencies, scalability and create value.”

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