Not-for-profit superannuation funds are considering the benefits of broadening their offering into SMSF services, as it is a key factor in retaining members most at risk of setting up an SMSF.
CoreData’s “2013 Member Retention Report” revealed funds were looking to offer members a greater range of services and were focused on tools and services to stem the leakage of funds under management (FUM) and members to SMSFs.
The report found offering SMSF services was key in keeping the business of 36.9 per cent of medium and 32.8 per cent of high SMSF set-up capacity members.
Furthermore, 54.2 per cent of respondents who had both SMSFs and an Australian Prudential Regulation Authority (APRA)-regulated fund were likely to consider using their APRA-regulated fund as an SMSF service provider if they were to offer that service.
“It is fair to say that in the search for growth opportunities, not-for-profit funds are increasingly behaving more like wealth managers and broadening their services,” CoreData head of advice, wealth and super Salvador Saiz told selfmanagedsuper.
“This means that these funds are, for example, focusing much more so than ever before on financial advice, but some are also considering their leakage to SMSFs and how they can best address this.
“As such, it shouldn’t be a surprise that we will see some not-for-profit funds offer SMSF solutions to members, just as some of the retail funds already have.”
Saiz said given the potential leakage of FUM to SMSFs in the next five years, funds should take note that 83 per cent, or four in five respondents, planning to set up an SMSF would consider using their current main fund’s SMSF services if they were on offer.
Participants with industry funds were most likely to use those.
The report found 44.5 per cent of survey participants stated advice played a critical role for those looking to switch funds, however, a large proportion of members were unaware their funds offered advice.
