The Alternative Investment Management Association (AIMA) has revealed SMSF trustees’ awareness and education level in relation to alternative investments have improved over the years, however, misconceptions about the asset class are still the sector’s biggest challenge.
“I think there has been a recognition – a lot of people are invested in funds they don’t view as alternatives and so when you start looking at the definition of a hedge fund, there are a lot of funds that may not call themselves that, but by all their characteristics, they’re pretty much no different to any other hedge fund,” AIMA director and general manager Michael Gallagher told selfmanagedsuper.
“The broader SMSF community is starting to get a hold of that and realise that, in terms of understanding and due diligence, that they look, act and feel like a hedge fund.
“So that’s where we come in and where we hope to build up their education level more.
“The key message we’re trying to address are the myths and misconceptions about alternatives – that’s the one big issue that we’re dealing with in the SMSF space at the moment.”
Gallagher said AIMA acknowledged the information gap existed and hoped to find ways to address it, as well as unravel the common myths.
“A lot of our fund managers and a lot of our members have approach it piecemeal in terms of education of their investors,” he noted.
“So where they see one of the benefits of AIMA is that we can come in and be the neutral educator.”
Commenting on where the starting point could be for AIMA’s SMSF education initiatives, he said: “Because of the broad nature of trustees in SMSFs – from small balances all the way to really large funds that have been going for years – it’s a hard question to answer.
“For example, I have a basic hedge fund 101 presentation that I give at events, all the way through to more complex talks, with everything in between.
“So we’ll typically tailor our education efforts towards what we believe is the perception of the audience and we’ll continue to do that.”