Rise in SMSF inflows indicate more people are moving into the sector
Inflows to SMSFs have almost quadrupled over the past five years and experts warn this trend warrants monitoring as it may signal shifting member preferences toward greater control.
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The 2026 Mercer Shaping Super report also stated that this trend could affect the competitive dynamics between SMSFs (which are ATO-regulated) and APRA-regulated funds.
The report serves as a wake-up call to super funds as they lose retirement accounts to platforms and uncovers that while adviser-focused platforms hold 6 per cent of super accounts, they are winning 42 per cent of all retirement account flows.
Mega funds (funds with assets of more than $100 billion), on the other hand, are attracting just 31 per cent of retirement account flows, despite holding 61 per cent of all super accounts.
The report warns that the industry is going through a huge transformation and the battle between mega funds and platforms is becoming the nuanced version of the traditional “retail versus industry fund” debates.
Additionally, the report revealed that Australia’s superannuation assets will reach $15 trillion by 2050, rising to approximately 170 per cent of GDP and consolidation is accelerating, with the number of funds forecast to decline from 75 in 2025 to 30 in 2035.
By 2035, the average fund is expected to quadruple to $161 billion under management, relative to its size today.
The report states that Australia was an early global adopter of Defined Contribution (DC) retirement system benefit desig
ns. DC arrangements now represent 91 per cent of the Australian system, with 66 per cent of total system assets held in APRA-regulated DC arrangements and the remaining 25 per cent in self-managed superannuation funds
By 2050, the report stated it expects defined benefit assets to account for only two per cent of system assets as these plans continue to “run off” with virtually no new entrants.
Long term, the report projected that APRA-regulated DC funds to account for 85 per cent of assets, driven by the segment’s strong growth, with contributions expected to continue exceeding benefit payments until the late 2040s (for the system as a whole, this point is reached in the mid-to-late-2030s).
It also projected that SMSFs will account for 15 per cent of assets, reflecting increased benefit payment levels from SMSFs and the growth of the platform segment which shares a similar “target market” demographic.
Platform funds are expected to grow, driven by strong adviser-led inflows, from 10 per cent to 14 per cent in 2035, likely becoming the “sector of choice” for individuals who feel inadequately served in retirement by traditional superannuation funds, or prefer the platform structure over an SMSF.
Keeli Cambourne
March 27, 2026
smsfadviser.com
