Financial Standard Comments - Industry funds ride SMSF wave

Comment by Smart Investor (N/A)

Smart Investor (N/A) — Mon, 23 Jul 2012 09:18:46 +1000

"For many people wanting that control who move to an SMSF they find when they get there that what ties up most of their time is the governance and compliance issues and they really don't have that much time to spend on the investment piece which was what it was all for."

You have to be kidding right? This is a nice piece of spin by the Industry Funds sector, but those that run SMSFs know it is so far from the truth. Any SMSF using a half decent administrator spends very little time doing compliance, as it is handled mostly for them, at a fraction of the cost of the fees of some of the bug funds, yes even industry funds.

Rather than pushing out spin, perhaps the Industry funds should focus on what is really loosing their memberships. Anyone with reasonable assets in their fund will find it cheaper to run the fund outside of the Industry model. Those within the profile of the Industry funds are still better off within them, those that have accumulated wealth are better off outside.

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Comment by A Lad (UNIP Australia)

A Lad (UNIP Australia) — Mon, 23 Jul 2012 13:29:02 +1000

Not only there will be an increase in SMSF but investors will be very conscious on Cost. Having noticed too many clients taking matters in their own hands because clients are tired of paying excessive fees on the service provided by some platform providers. SMSF cost is likely to fall in the next 12 - 24 months with more providers on the market. Similar to what Internet broking has done, over the past 10 years.

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Comment by Greg Einfeld (Lime Super)

Greg Einfeld (Lime Super) — Mon, 23 Jul 2012 13:44:41 +1000

Smart Investor is spot on here, while the industry funds and retail super funds are living in fairy land. The article refers to people voting with their feet. They have - and that is why there is more money in SMSF's than industry funds or retail funds. Consumers are rejecting the high fees, lack of control, and lack of transparency that you get with industry funds and retail funds.

What's more, the "SMSF-like" capability referred to in the article looks nothing like an SMSF at all. For example, will they allow the purchase of direct property? direct bonds? Investment in any listed or unlisted managed fund in Australia? And will they allow a member to buy a growth asset in the accumulation phase and then sell it in the pension phase without paying CGT? I don't think so.

So my message to people who have accumulated a reasonable amount of super - start taking control of your super and consider an SMSF.

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