Written

For

The

Australian

-

Self-managed

super’s

revival

is

well

and

truly

under

way

and

it’s

not

just

among

the

over-60s

Nine times more new self-managed super funds were established last financial year than five years ago. Let that sink in. The SMSF sector, long dismissed as a plaything for older, wealthier Australians, is undergoing a genuine transformation — and it's the under-50s driving it.

Nearly 64% of new SMSF members are now under 50, and a whopping 90% are under 60. That's a seismic shift from the traditional SMSF demographic, and it's changing how these funds invest.

Looking at the numbers, the average SMSF balance sits at $1.45m, but the median is a more modest $826,299. That gap tells you there are some enormous outliers — including one SMSF with over $500m in it — pulling the average up.

What I find most interesting is how younger trustees are reshaping asset allocation. Exposure to overseas shares is up 91% over five years. Cryptocurrency holdings have jumped 400% (albeit from a tiny base — still only 0.1% of total assets). Unlisted shares, private equity and venture capital exposure is up 52%. Even collectibles — art, wine, cars — have grown nearly 60%, likely a Covid lockdown legacy.

Meanwhile, cash allocations are shrinking as trustees hunt for growth. Australian shares remain the anchor at 29%, and commercial property continues to trump residential inside SMSFs by nearly two to one — the opposite of what mum-and-dad investors do in their personal names.

One thing to watch: financial literacy. A 2020 QUT study found half of SMSF trustees had low financial literacy. With more younger, less experienced trustees entering the sector, the ATO will have its work cut out ensuring compliance keeps pace.

The takeaway? SMSFs are no longer the retirement vehicle of choice just for those in their 60s eyeing off retirement. They've become a flexible wealth-building tool for a much broader — and younger — cohort of Australians who want control over where their super is invested.