Retail and industry superannuation funds have been unable to challenge the SMSF market due to weak branding and marketing, according to the former managing director and founder of CommSec.
“When you look widely across SMSFs, investors think they can do it better and think they can do it at low cost, which are both perceptions, so potentially how you brand and market yourselves about the expertise that you have to offer [is crucial],” Lumus Financial Services principal Paul Rickard said at the SuperRatings Day of Confrontation in Melbourne in October.
“I think there’s still an issue with branding because I look at how many of the super funds are currently marketing themselves and it’s still very big on safety and security; almost still a hangover from the post-GFC (global financial crisis) days, which doesn’t read to me that you’re investment experts in your craft.
“Arguably, isn’t your brand about investment expertise?”
More cost-effective offerings could get some of the SMSF money back inside the industry and retail funds, Rickard said.
In addition, there was an opportunity for super funds to create their own SMSF portals.
“If you’ve already got member-direct investments, particularly around listed equities, expand that,” Rickard said.
In response to whether the new government was likely to step in and legislate a minimum amount needed to establish an SMSF, as a solution to concerns the structures were being oversold, he said he was opposed to the idea.
“In our business, I wouldn’t recommend anyone to even think about an SMSF if they have under $300,000 to $400,000, but I don’t think it’s the government’s job,” he said.
“I’d rather see competition and it’s up to the industry to respond to that.
“People think they’re cheaper, so it’s a perception issue.”
