The toughest tasks for self-managed super

 

What are the hardest aspects of running your self-managed super fund (SMSF)?

 

 

Is it the paperwork, all of the investment rules or the fundamental challenge of choosing where to invest your money?

If you named choosing investments for your SMSF as the toughest task, you would be far from alone.

A comprehensive survey for the Vanguard/Investment Trends 2016 Self-Managed Super Fund Reports, released during the past week, asked SMSF trustees to list the hardest aspects of running an SMSF. Their main responses included:

  • Investment selection (43 per cent). This percentage has risen over the past year as SMSF trustees, along with other investors, attempt to come to terms with the low-interest environment and widespread expectations for more challenging and volatile investment conditions over the medium-to-long term. (See Vanguard's economic and investment outlook, Australian edition, from our Investment Strategy Group.)
  • Administration and regulation (40 per cent). This includes having trouble keeping track of changes in the rules.
  • A lack of time including to review and plan for their SMSFs (24 per cent).

Interestingly, 22 per cent of respondents to the survey did not find any aspect of running their fund difficult.

The finding that more SMSF trustees have difficulty choosing investments would also partly explain another finding from the survey that a large proportion of SMSFs recognise that they have unmet needs for advice.

An estimated 255,000 SMSFs – out of 572,000 funds at the time of the survey – had unmet needs for advice. This is the largest number recorded by Investment Trends over the years.

"Advice needs most often relate to retirement," the report comments, "though more [SMSFs] are citing investment-related advice gaps."

For instance, an estimated 146,000 SMSFs have broad unmet needs for advice on retirement strategies while 139,000 have unmet needs for investment advice. And an estimated 100,000 funds have unmet needs for advice on tax optimisation.

Drilling down on more specific unmet needs for advice, SMSFs recognise their need for advice on inheritance and estate planning (an estimated 61,000 funds), SMSF pension strategies (57,000), age pension and other social security entitlements (55,000 funds), investment strategy/portfolio review (52,000), identifying undervalued assets (51,000), Exchange Traded Funds (46,000), offshore investing (43,000), trying to ensure members don't outlive their savings (42,000 funds) and protecting assets against market falls (39,000).

The finding that 44 per cent of Australia's SMSFs recognise that they have unmet needs for professional advice is extremely positive. This should lead to more fund trustees working with advisers to set appropriate asset allocations for their diversified portfolios, checking on the adequacy of their retirement savings and setting suitable retirement income strategies for retired members.

 


By Robin Bowerman
Smart Investing 
Principal & Head of Retail, Vanguard Investments Australia
15 August 2016

 

Any advice contained in this website is of a general nature only and does not take into account your circumstances or needs. You must decide if this information is suitable to your personal situation or seek advice.

Rolanda has been my financial adviser for 20 years. I have always found her to be highly intelligent, knowledgeable and professional in her career. Rolanda is accessible at all times and patiently explains terms that I do not fully understand. I can highly recommend Rolanda and it is a pleasure to do so. I do this with the utmost confidence. Marcia Montgomery (Retiree – home duties and ex-clerk with Water Board)
I retired Oct 2012, and seeking Financial Advice for my retirement funds, I decided to have Rolanda look after my financial affairs, and so happy I did. Since my retirement I am extremely comfortable with Rolanda’s advice, experience and strategies and the returns on my investments. Rolanda is my "Breath of Fresh Air" at this stage of my life and she makes herself available 24/7 should you need to talk with her. Steve Hoad (Ground Engineer, Qantas)
In 1997 I left Energy Australia and decided to join Rolanda Adams Financial Services for the financial support and advice that I would need into the future. That decision has proved a very good one and I am still with Rolanda who has given me advice and friendship over those many years. The advice given has ensured that my investments have been protected and the major losses, of some, during the GFC was not felt by me unduly. Rolanda and her team are very easy to contact at any time and one is always received in a most professional manner. I would be most happy to recommend Rolanda Adams Financial Services to all who need financial services. Graham Fleeton (Manager, Property Insurance Group Energy Australia (Ausgrid))
Rolanda has been my Adviser for the past 18 years. Through her wide industry experience and professional expertise she has ensured the sound development and ongoing management of my investments. Her advice has invariably been sound, timely and entirely tuned to meet my personal needs in retirement. She has a friendly, engaging manner and is always readily available to address any of my concerns. I have no hesitation in recommending her. Neil O'Keeffe (Chief Inspector (retired), Australian Customs Service)

© 2021 Rolanda Adams Financial Services Pty Ltd. All rights reserved. Site by PlannerWeb.