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Financial Planning, Superannuation

Advisers acknowledging younger SMSF cohort

Younger trustees are rising in SMSFs and come with different needs.

Practitioners in the SMSF space are recognising the shift from older trustees to younger trustees and are working to gain an understanding of their specific needs, according to the SMSF Association.

“It’s certainly an area that gets discussed quite a bit,” association chief executive John Maroney told selfmanagedsuper.

“A key aspect is the balance tends to be higher for people who are older, but then again, people in their 40s who have had 25 years of superannuation guarantee – while it hasn’t been 9 per cent the whole time – so you are now seeing high balances at younger ages than we would’ve seen five or 10 years ago.

“I think there’s more flexibility in what technology offers [when it comes to managing their fund and taking up financial advice].

“So some of the younger trustees are looking for a more technology-savvy approach to their retirement.”

Important also are the questions advisers must consider for younger SMSF clients, Maroney noted.

“Advisers are working through the options of whether it’s a ‘right now’ issue or something to think about in three, four or five years’ time,” he said.

His comments come on the back of the recently published SMSF Association “SMSF Investor Insights: Discussing key myths surrounding SMSFs” report, based on Investment Trends data, which focused on the issue of whether an SMSF is suitable for everyone.

“SMSFs can be complex, so most importantly it must be remembered that the ultimate responsibility for compliance with the super rules falls upon the SMSF’s trustees,” the report said.

“Reinforced by the research, though, SMSFs are not just geared towards older, richer Australians, but younger ones as well.

“The average age at the time of establishment for SMSFs is now 48, with the trend getting younger and younger.”

The Investment Trends data showed 25 per cent of SMSFs now have a member below the age of 49 in the fund.

The release of the paper, sponsored by OpenInvest, kicked off the inaugural SMSF Week, running from 19 to 23 November.

The aim of SMSF Week is to improve Australians’ understanding of SMSFs and how trustees can mitigate common risks.

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