The SMSF Professionals’ Association of Australia (SPAA) and Russell Investments released their 2014 report, Intimate with Self Managed Superannuation, at the SPAA National Conference in Brisbane on Wed 19.2.2014.
The report says that strong growth in the SMSF sector is expected to continue from younger generations. SPAA noted that those aged over 50 still dominate the SMSF market but the 41-50 age group continues to be the largest source of demand for three-quarters of financial planners. This is followed by the 31-40 age group, where 2 in 3 advisers are expecting greater demand.
While the proportion of people looking to establish an SMSF in the next 5 years has dropped to 12.3% from 17.3%, SPAA said the intention still remains high over the longer term with 14.3% of non-trustees likely to set up a SMSF over the next 5 years. However, SPAA CEO Andrea Slattery warned that contribution caps and constant legislative change are still taking their toll and resulted in SMSF trustees under-investing for retirement by id=”mce_marker”6bn a year.
On the investment front, the expected transition out of cash in 2013 did not occur with SMSF cash allocations only falling to 31% (down from 33.9% in 2012). Australian equities also showed a slight decline from 37.1% to 36.1%, but residential property rose from 5.6% in 2012 to 9.9% in 2013.
Scott Fletcher, Director, Client Investment Strategies at Russell Investments, said strategic investment advice (53.1%) is most valued by SMSF trustees, followed by tax advice (52.3%). While 3 in 5 trustees claimed to have a “strong” or “very strong” knowledge of investments (with 51.9% using their own research), Mr Fletcher said there is a clear role for financial advisers to help SMSF trustee improve their portfolio design and diversification outside of cash and Australian equities.
Source: SPAA media release, 18 February 2014
[LTN 33, 19/2/14]