Listed wealth management platform Hub24 has revealed it will continue to expand its product menu for advisers to address SMSF portfolio needs as part of its ongoing plans for the sector.
“Our strategy for the SMSF market will be about continuing to expand our product menu, so that means the investment options available and also continuing to work with advisers to provide great advice solutions and administration solutions for SMSF clients,” Hub24 managing director Andrew Alcock told selfmanagedsuper.
“I still think there are many SMSFs that don’t have good-quality financial advice and so potentially not getting the benefits of proper portfolio diversification.
“There’s a huge opportunity for Hub24 to work with advisers to change that.”
Alcock stressed SMSFs in Australia still held more than 20 per cent of their assets in cash.
“That might be because they’re worried about capital losses or the age of an SMSF investor typically, but on our platform there’s only 7 per cent in accounts for SMSFs in cash,” he revealed.
“That suggests to me that advisers are making sure their clients with an SMSF are still actively invested in the market because it’s good for them, their capital growth and their income.
“So if we can help the market with education and help advisers with that, there’s a good business opportunity for Hub24, advisers and an absolutely great outcome for SMSFs who currently don’t have advice.”
Commenting on offshore allocations, he referred to Hub24’s “International managed portfolios: A gateway for SMSFs to invest overseas” white paper, from June 2016, which found 17 per cent to 20 per cent of SMSF asset allocation was to international assets.
“[At July 2017], it’s 26 per cent to international and that’s exposure either through direct equities or through managed funds or exchange-traded funds,” he said.
“So it has gone up and that may be a reflection of general adviser attitudes to asset allocation, but it is nice to see more exposure to international equities for SMSFs, so that has changed for us.”
About 8.5 per cent of Hub24 customers are SMSFs and make up about 20 per cent of the assets on the Hub24 platform.
Alcock also shared his concerns about SMSFs functioning without advice.
“I think if you’ve got an adviser, your adviser has a strategy for you already as an SMSF client, so it is business as usual in terms of reviewing your clients and helping them to achieve an outcome by setting an appropriate strategy,” he said.
“If you don’t have an adviser, the question to ask is: are you invested in the best way possible for your future?
“There are a lot of SMSFs out there that could do with a great adviser relationship, and Hub24, as a managed account provider on platform, can offer solutions that absolutely fit those clients.
“And I think we need to see more of that.”
