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Young trustee growth to reward specialists

SMSF specialist advisers could be the beneficiaries of the continued strong attraction to SMSFs by younger Australians, however, their services were underused, according to a report from the SMSF Association and nabtrade.

The fifth “Intimate with Self-Managed Superannuation: A snapshot of trustee findings” report, prepared by CoreData, revealed most young trustees were looking for an adviser to receive the right support and advice they needed to manage their SMSF.

However, advisers needed to be competent to service that younger, savvy group, the report said.

SMSF Association chief executive Andrea Slattery said the findings, along with anecdotal evidence gathered from member discussions, suggested it was a potentially lucrative market opportunity for SMSF specialists.

“The report’s figures says it all – more than two-thirds of trustees, 68 per cent, aged between 20 and 30, and more than half, 52.9 per cent, of those aged between 31 and 40 are not receiving financial advice,” Slattery said today.

“This underutilisation of specialist advice is despite the fact that younger trustees are more likely to find SMSF-related tasks challenging, especially as they relate to compliance.

“The other pertinent fact is that these trustees are actively seeking an SMSF specialist offering a one-stop shop that covers all their needs, so those advisers who are competent and can meet this objective are well placed to take advantage of this emerging market.”

The report said in the past two years, 65.7 per cent of advisers had noted growing demand from 31 to 40 year olds, in line with 2013 at 66.2 per cent, while 21.7 per cent had experienced an increase in demand from 20 to 30 year olds, down from 34.4 per cent in 2013.

What was fascinating about the development of younger people looking to establish an SMSF was that they did not regard their relatively low balances or the compliance responsibilities as barriers to entry, Slattery said.

“They want to be engaged with their superannuation on a long-term basis, to take control of it from a young age, cognisant of the fact they are likely to be living well into their 90s,” she said.

“They want to be self-reliant in retirement and that’s to be encouraged.

“These results confirm one of the SMSF Association’s core beliefs – that how well we live in retirement is a function of how well we have managed our super and who has advised us.”

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