New SMSF statistics show changes to the gender mix in DIY funds

More women and workers from Gen Z are flocking to self-managed superannuation funds, with divorce and better pay packets partially driving the trend.

The SMSF statistics might also be impacted by women leaving their spouses and setting up their own fund.

More women and workers from Gen Z are flocking to self-managed superannuation funds than a decade ago.

And the trend could continue as the compulsory rate of super increases to 12 per cent and the earnings gap continues to close.

In the March quarter this year more women aged 35-44 established SMSFs than men.

The latest Australian Taxation Office statistics also show people aged between 25 to 34 now account for one in 10 members that established SMSFs in the three months to March.

That’s a big jump — it compares to only four per cent in the June quarter of 2014 — with people at the bottom end of the range classed as Gen Z.

Traditionally, SMSFs tended to be much wealthier than the average Australian with much larger super balances, meaning SMSF data was skewed towards older and male categories.

But demographics are changing with women growing their wealth and keen to manage it.

With the rate of compulsory super at 10.5 per cent and rising to 12 per cent by July 2025, younger people can achieve larger balances in super earlier than before. And with the earnings gap closing from what it was a decade ago, women are choosing to manage their own super more often.

“Younger women have far more super than women in the past and that’s fantastic, and we see younger women being far more active in managing their own wealth. It’s really exciting to see women are taking the reins,” says Gemma Dale, director of SMSF and investor behaviour at nabtrade.

nabtrade’s director of SMSF and investor behaviour Gemma Dale. Picture: Supplied.

“Males still dominate most financial metrics. They hold more retirement assets, they hold more shares, they hold more everything.

“But this is changing. Slowly, the change is happening, and you can see it coming through in the data now.”

The rise in young women establishing SMSFs can be partly attributed to their increasing desire for financial independence, but there are other factors at play.

The ability to actively manage investments, including shares and other assets, might also provide a sense of empowerment, enabling them to shape their financial destiny. There’s also a substantial wealth transfer from older generations to younger generations and women are inheriting half that money.

This just adds to the picture of women becoming wealthier in their own right and not outsourcing the decision making to men.

The SMSF statistics might also be impacted by women leaving their spouses and setting up their own fund.

“The trend of women taking the reins of their own financial situation and financial future has been evolving – self managed super funds are one of the last pieces of the puzzle,” says nabtrade’s Dale.

“And that‘s because you tend not to set one up until you’ve got a pretty sizeable balance and you’ve got some experience,” she says.

SMSFs are typically established by couples because combining assets makes for a much more effective fund, but the idea that your husband is going to look after all the money is no longer a thing for the vast majority of women, Aspire Retire co-founder Olivia Maranga suggests.

“We are finding more and more of our clients are couples where the female is the breadwinner,” she says.

“They are proactive in seeking advice because they know that they are making sacrifices when it comes to family in their highly paid roles – they want the sacrifice to be worth it.”

With the earnings gap slowly closing in the last decade, women’s savings are growing to a point where their super balances are reaching a level that makes considering SMSFs worthwhile much earlier than before.

“When we look at university students, women continue to outnumber men studying a degree and also finishing a degree. We have more women being educated which equates to more women earning better salaries and more compulsory superannuation,” says Maranga.

It used to be that SMSFs would need at least $500,000 to be cost-efficient, but experts say that point can now be nearer to $200,000 (each member) to make it worthwhile.

And it is not only younger women who are using SMSFs to manage their wealth.

Maranga from Aspire notes that at the other end of the spectrum, life expectancy also favours women.

In the December quarter, more women in the 75 to 78 age bracket established SMSFs than men of the same age, while in March quarter, women of the so-called ‘Silent Generation’ are also estimated to have outnumbered men establishing SMSFs.

“We generally live longer than our male spouses which generally means we end up with the remaining super balance once the husband passes away,” Maranga says.

“If the husband’s superannuation is structured well, the balance of the retirement savings remains in the super environment for the female to continue to live off.”