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New trustees show strategic nous

SMSF trustees strategic

Research conducted earlier this year has indicated SMSF trustees who established their funds between 2020 and 2022 are strategic in their approach.

The latest research into the sector has shown newly established SMSF trustees are strategic in their approach, maximising the benefit they can receive from the superannuation system.

“We’ve seen this very recent cohort of younger trustees … more likely to have actually kept their existing super fund,” Investment Trends head of research Irene Guiamatsia noted.

Specifically, the “Vanguard/Investment Trends SMSF Report” for 2022 revealed 29 per cent of individuals who have recently set up an SMSF still have an account with an industry or retail super fund and are intending to keep it.

Further, the study indicated around 53 per cent of individuals who established an SMSF between 2020 and 2022 are taking this course of action to enjoy the most prudent use of the current retirement savings framework.

“In the main the dominant reason is really around [having] cheaper insurance and some of the benefits of having an APRA (Australian Prudential Regulation Authority)-regulated super fund account that they wouldn’t otherwise have within their own SMSF,” Guiamatsia said.

Strengthening the evidence these trustees are maintaining their membership in a public offer fund is the fact 30 per cent of survey participants admitted to doing so because it means their retirement savings investments will have greater diversification and in turn lower risk.

Guiamatsia did acknowledge some people may have made the decision as a matter of convenience.

“It could be that [how recently] they’ve actually set up the SMSF account means they haven’t gotten around to winding [up their existing] super fund account,” she noted.

Supporting this theory is the finding from the report that around 29 per cent of the group who have chosen to maintain a superannuation account in addition to their SMSF said the motivation for doing so was because their current contributions are being paid into that account.

The “Vanguard/Investment Trends SMSF Report” for 2022 was formulated from 2430 online responses submitted by SMSFs between March and April.

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