Understanding the Increase in New SMSF Trading Accounts

It’s an exciting time to be an Australian with an SMSF or self-managed super fund. Over the past few years, we’ve seen a significant shift in how people manage and grow their retirement savings. More and more Australians are taking control, and a big part of that has been the surge in people opening new SMSF trading accounts.This trend shows a great sense of financial empowerment. People are getting hands-on with their super, choosing their shares, and digging into the markets. It’s impressive, but it also brings up a question: Is your SMSF account diversified enough?

First, What Exactly Is an SMSF Trading Account?

An SMSF trading account is a brokerage account that you open under the name of your self-managed super fund. Think of it as a bank account for your investments, but one that is strictly for your super savings and is governed by superannuation rules.

Its purpose is to give you the ability to buy and sell shares, exchange-traded funds (ETFs), and other listed securities. Instead of your super fund manager making these decisions for you, you, as the trustee of your SMSF, are in the driver’s seat. You’re the one choosing what to invest in, when to buy, and when to sell, all within the rules set by the ATO.

Essentially, an SMSF trading account gives you direct control over the specific companies and assets your super is invested in, and that’s a powerful thing. So, it’s no wonder that so many people are drawn to it.

The New Face of SMSF Investing

Recent reports show a significant increase in new SMSF trading account activity. While Baby Boomers accounted for more than 50% of new SMSF accounts (both advised and self-directed), we’re seeing a new wave of investors—including younger Australians, particularly Millennial SMSF investors—getting involved. Interestingly, these new investors largely focus on SMSF share trading.

This often means that a huge portion of their retirement savings is concentrated in a few areas, like the Australian banking, local mining sectors, or global equities. When those sectors are doing well, the fund thrives. But what happens if they hit a rough patch? What if a global event or a shift in the market sends those shares tumbling?

An over-concentration of shares, no matter how strong the companies may seem, exposes your retirement fund to a lot of risk. Putting all your eggs in one basket is a cliché for a reason.

A Bigger Picture for Your Retirement

If you want a resilient SMSF account, you need to think beyond the daily ups and downs of the share market. A well-rounded portfolio isn’t just about picking the right stocks, after all. It’s best to spread your investments across different asset types. This is the simple secret to a more stable retirement savings plan.

This is where a tangible, long-term asset comes into play. Something that doesn’t just rely on the performance of a handful of companies. We’re talking about property.

Property: The Perfect Partner for Your SMSF

Investing in SMSF real estate offers a level of stability and control that many share portfolios just can’t provide. Think of it as the solid anchor in your fund.

- Real, Tangible Value: Unlike a volatile stock price, an SMSF real estate investment is a physical asset that you can see and easily understand.

- Steady Income:

A rental property provides a regular income stream that goes directly into your super fund. This helps your fund grow steadily, no matter what happens in the stock market.

- Long-Term Growth:

Property has a history of long-term capital appreciation, which aligns perfectly with the goal of growing your retirement savings over decades.

Simply put, an SMSF property can provide a crucial balance to a share-heavy portfolio, smoothing out the bumps and giving you a strong foundation to build on.

How to Make SMSF Real Estate Happen

Many people think you need to have the entire property value in cash to buy it with your super. This isn’t true. You can secure an SMSF loan, which can be pulled off through a Limited Recourse Borrowing Arrangement (LRBA), to fund your investment.

An LRBA enables your SMSF to borrow money to buy a property. The best part? The loan is only tied to that specific property. This means that if something unexpected happens, your other assets within the SMSF account are protected.

Your Trusted Partner: SMSF Loan Experts

Getting an SMSF loan for a residential or commercial property investment can be a bit complex, and that’s okay. You don’t have to figure it out alone anyway. At SMSF Loan Experts, we specialise in making this process easy to understand. We’re here to guide you, answer your questions, and find the right loan for your specific needs. Our goal is to help you build a more diverse and secure retirement fund.

Want to add a solid property asset to your SMSF real estate strategy? Let’s have a chat about your options and how we can help you get started. Give us a call today.