- Staff Reporter | May 29, 2018
Not just required by law, professional advice is accepted as one of the keys to success in any SMSF.
Key drivers for self-managed super fund professional adviceAccording to research from AMP Capital, 25 percent of self-managed super fund (SMSF) trustees surveyed said they were happy to pay for advice from a professional when it came to management of their fund.
With 600,000 funds (and growing) in Australia, that’s a LOT of potential business for SMSF advisers. And because of recent legislative changes, which mean that accountants can no longer offer SMSF investment advice, there’s a significant knowledge gap which can be filled by SMSF advisers.
Compliance can be challengingAMP Capital quotes a whopping 83 percent of SMSF trustees as having difficulty managing their fund. That makes sense, especially when you consider that the average SMSF trustee has never entered such a complicated regulatory framework before.
The ATO states trustees must act in compliance with their fund’s Trust Deed, the Superannuation Industry (Supervision) Act 1993 (SISA) — Superannuation Industry (Supervision) Regulations 1994 (SISR), the Income Tax Assessment Act 1997 (ITAA 1997), the Tax Administration Act 1953 (TAA 1953) and the Corporations Act 2001.
Further, research from Partners Wealth Group reports that for 40 percent of trustees, administration and regulation are the hardest parts of running an SMSF. https://blog.wmcaccounting.com.au/superannuation-funds/what-are-the-key-trends-for-smsfs-in-2017-so-far
And who’s got the time? Hint: it’s not trustees, who are more time-poor than ever. The average SMSF trustee only has 3.4 hours a month to dedicate to managing their fund, according to AMP Capital.
Good advice is worth its weight in goldThe goal of superannuation is to ensure that you have enough money to live with dignity and security after retirement. The age pension in Australia is estimated to only cover a third of the costs of living — saving through superannuation is incredibly important and it would be a disaster to lose all your hard-earned super because of inexperienced investing and bad investment decisions.
With increased market volatility over the past few years, more SMSF trustees are seeing the value of getting professional advice to achieve their goals — AMP Capital reports that 31 percent would like advice on “investment strategy and protection” (though only 25 percent said they were prepared to pay for it).
Investment Trends does report some level of investor overconfidence, with 28 percent of SMSF trustees surveyed saying that one of the reasons they set up an SMSF is a belief that, “I can make better investments than the big fund managers”. https://www.smartcompany.com.au/finance/superannuation/the-pros-and-cons-of-a-smsf/
However, those numbers might not add up, with ATO reports showing that, over the long-term, SMSF are seeing slightly lower returns than the large super funds. It’s close though — with SMSF showing average 10-year returns of 4.78 percent and the large traditional funds 5.01 percent.