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Better SMSF performance data required

The chair of a major not-for-profit superannuation fund has called for better information allowing SMSF trustees to measure their portfolio performance more effectively.

Speaking during panel session at the recent Financial Services Council Leaders Summit 2016 UniSuper chair Chris Cuffe told delegates: “[One] thing I think that has been really poor is people who run [SMSFs], or perhaps even promote them, is the measurement of the return.

“I know this through my involvement in various surveys – most people who have self-managed super funds have no idea what returns [are].”

Cuffe added if people took into account behavioural finance and human bias most SMSF trustees would probably think their fund would be performing better than it is.

As such he called on the ATO to play a part in improving this situation.

“It’s always astounded me why [an organisation] like the tax office doesn’t give you the return of your self-managed super fund each year,” Cuffe said.

“It is very easy and simple maths, as long as you know the opening and closing balance and any fund movements in, as in new contributions which the tax office knows, and any outflows in terms of benefit payments. Then it is a very simple calculation.

“So you could easily put that and then you can say here is the average of the public offer funds.”

On a separate issue the panel revealed the practice of not-for-profit superannuation funds to offer its members direct share trading capabilities in an attempt create an SMSF like environment to stop member leakage has not proved to be very popular.

“Some funds have tried [to offer a greater level of investment control for its members] but there hasn’t been a lot of take up for member directed investment like shares,” Sunsuper chief executive Scott Hartley said.

While this leakage measure had not been as favourable as anticipated, Hartley revealed Sunsuper had noticed a trend coming from the SMSF side.

“We are seeing evidence of self-managed super investors coming back to pooled funds – there is some of that happening now which is interesting and I think the general changes that have been proposed in Canberra, that have got bipartisan support largely, will make [growth of the SMSF sector] even slower,” he said.

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