The latest sector research has shown the number of SMSF establishments is set to increase over the coming five years as a direct result of the COVID-19 pandemic.
Speaking at the selfmanagedsuper/CoreData SMSF Awards event held online last week, CoreData managing director Jason Andriessen said: “What we’ve seen is there is more intention to set up a self-managed super fund. In fact, our data is telling us that almost one-fifth, or 19 per cent, of the non-trustees that we surveyed are likely to establish a self-managed super fund within the next five years.
“Why is that? It’s probably driven by the COVID-19 environment to be frank.”
To this end, Andriessen pointed out the research revealed two-thirds of both advisers and SMSF trustees who participated in the study admitted they are expecting a slowdown in the Australian economy over the next 12 months.
“This is no great surprise now that we are experiencing the first recession in 28 years,” he said.
“And the reality is that market uncertainty and market disappointment leads to people seeking control of their own money.”
According to Andriessen, analysis of superannuation returns has shown when the median annual returns of the balanced option in public offer funds have fallen over the past 14 years, the number of SMSF establishments has risen.
“And when we ask the trustees why they set up a self-managed super fund in the first place, our hypothesis is confirmed. The research showed by far and away the most popular response was to have greater control,” he said.
“This absolutely confirms our hypothesis that periods of turmoil or disappointment lead to a boom in the self-managed super sector.”
The survey was conducted online in August and analysed responses from 464 advisers and 950 consumers.