New products and services being developed and offered by industry and retail funds will not slow the popularity or growth of the SMSF sector in the coming years, particularly among retirees, according to a retirement savings expert.
“There certainly are new products coming out into the market that are starting to replicate some of the aspects as to why people start up SMSFs, but it will come down to what it is about an SMSF that is attracting older clients and whether they feel they can get enough of that control through some of these more simplistic products and offerings,” Strategy Steps director Louise Biti told attendees at a recent SMSF Professionals’ Association of Australia Sydney Chapter luncheon.
“I think there is certainly going to be some interest there. I think some people are going to want to use those products because they won’t need to take on all the responsibility of being trustee and managing their investments.
“But I don’t think it means it’s going to significantly wipe out the sector, rather just shift where some people sit.”
Biti said the determining factors as to whether or not retirees wanted to run their own superannuation fund were legal capacity in regard to compliance and physical capacity to want to do it.
She added her experience was showing her retirees in the main had both of those characteristics and were being aided in the process by technology, such as the Internet.
“What I see from a lot of the retirees now is they have the desire to run their own fund, they certainly have the capacity, and they have the time and energy to do it,” she said.
“They’ve also got access to information, education and resources on the Internet [to help them], but they are looking very much for someone who can guide them through it and counsel them to make sure they are going about it the right way.
“So even though some of these other products might replicate some SMSF aspects, they won’t satisfy people’s desire of wanting to own the management of the fund. That’s something you can’t take away from SMSFs.”
