The Australian Taxation Office (ATO) has confirmed that the current market downturn has caused a spike in the creation of self-managed superannuation funds (SMSFs).
The deputy commissioner of taxation, Neil Olesen, has told a Sydney conference that during recent times there had been two noteworthy spikes in the level of interest in SMSFs, with the first being the transition to the Better Super changes from April to June 2007, when more than 22,500 funds were established in a very short period.
He said the second period was now and that since September last year, new registrations had been tracking at around 20 per cent higher than the equivalent period a year earlier.
“One reason may be because people think they can do a better job with their money than the big funds,” Olesen said. “Managing their own money means managing their own future. This is a trend we’ve seen before and it’s not unexpected.”
However, he said what was less obvious to the ATO because of lag effects was how many people were exiting the sector due to financial management in the current market looking a whole lot harder.
He said the anecdotal evidence suggested that the numbers of people getting out of SMSFs would be higher too, albeit that this was not a trend the ATO had witnessed previously.
