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It can also be seen from the graphs above that the superannuation system is forecast to double from its current size in around 7 years to $3 trillion.  To put this in perspective, the value of all companies currently listed on the ASX currently is valued at around $1.6 trillion.  This indicates that Australia's superannuation system will soon become larger than the entire Australian share market.


The Murray Review of the financial system that was recently released also held some interesting aspects for SMSF's as it criticised the ability of super funds to use leverage to purchase property.


Not only is this interesting information, but investors should also consider how to take advantage from growth in the superannuation industry in Australia.  We make a few observations on this front:

  • The superannuation system will become too large for the Australian share market, and superannuation funds will need to look beyond Australian shores to invest
  • Pressure on superannuation management fees is likely to continue - investors should seek out those who have offered higher after fee returns over time who are more likely to protect their margins
  • There are several companies that are well placed to take advantage of both of these observations including Platinum Asset Management, Magellan Financial Group, AMP, Macquarie Group (not limited to these players)