Industry funds provide an alternative
The reasons people wind up their SMSF are being keenly observed by large industry funds.
“At UniSuper, we've seen trends emerging in those taking up SMSFs,” says Derek Gascoigne, state manager, advice, at UniSuper, in an article on investment website Firstlinks. “The average age of UniSuper members rolling out to an SMSF is age 50, while the average age of our members who roll money in from an SMSF is 62, and with an ageing population we are seeing more members rolling in from their own SMSF.”
“Over time, the SMSF members' financial goals and their desired level of involvement in managing investments may change or wane, or the original purpose for creating an SMSF may no longer be necessary, for example, if the asset that it was specifically set up to own is no longer held within the fund. In our experience, some people start to ask if this is how they want to be spending their time.”
Depending on the assets in the SMSF, and the professional advice received, Gascoigne says running costs can be anything from $1500 to
$10,000 a year, even before adding the management costs of any underlying investments.
Dena Brockie, head of superannuation and retirement products at AustralianSuper, says her fund's research “shows that 46% of SMSF account holders who open an account with the fund switched as a result of being frustrated with the complicated nature, time investment and cost associated with managing the SMSF account”.
She says AustralianSuper's self-managed investment option, Member Direct, enables members to invest in ASX 300 shares, exchange traded funds, listed investment companies, term deposits and cash through an easy-to-use online platform.
“Members can combine their Member Direct investment portfolio with AustralianSuper's other investment options to manage their desired investment strategy.
“The Member Direct investment option offers a cost-effective alternative to the ATO-regulated SMSF sector. AustralianSuper takes care of all the administration, compliance and reporting requirements. There are no set-up charges and ongoing fees are lower compared to an SMSF,” says Brockie.