SMSF growth delivers windfall to platforms

Platforms have emerged as the major beneficiaries of the growth in self-managed superannuation funds (SMSFs), according to data collected by specialist superannuation clearing house SuperChoice.

The SuperChoice data tracks not only the destination of employer contributions but also those of employees and, at the same time as reinforcing the dominance of SMSFs and the big name brands, has also served to explain why inflows into retail master trusts have remained strong despite the rise and rise of SMSFs and the continued growth of industry funds.

According to SuperChoice general manager Michael Fielding, the company’s data has confirmed a trend where higher contribution dollars move to the major retail funds.

He said this was especially the case when it was realised that SMSF money tended to flow directly back onto the investment platforms.

Fielding told Money Management that as much as 50 per cent of SMSF monies were flowing to the investment platforms — something that would tend to explain the continued dominance of Australian Prudential Regulation Authority data by the retail master trusts.

The SuperChoice data also revealed the narrow band of super fund flows, with 17.13 per cent being directed towards SMSFs and 10.99 per cent to industry fund AustralianSuper, with the remaining five positions being filled by AMP, MLC, BT, Colonial First State and ING.

SuperChoice said its data showed that AustralianSuper remained the number one superannuation fund in Australia, and AMP the largest retail fund by a wide margin.

The data confirmed the Plan for Life data underpinning this week’s Money Management master trusts and wraps feature, which pointed to the dominance of the major bank-backed platforms as well as the consolidation that is occurring in the sector due to recent mergers and acquisitions such as IOOF’s of Skandia and National Australia Bank’s of Aviva and, therefore, the Navigator platform.

The Aviva acquisition seems certain to give NAB/MLC a dominant market share in circumstances where it already commands 13.9 per cent, followed by AMP with 12.4 per cent, the Commonwealth/Colonial Group with 11.4 per cent and then BT Financial Group with 11.1 per cent.