Administration, Investments, SMSF

Concept of control defined

SMSF trustee control

The concept of control sought by SMSF trustees has been more specifically clarified by the latest research into the sector.

The latest sector research has identified the specific sense of control individuals are searching for when they decide to establish an SMSF.

“What they mean [when refer to control] is they want to be able to pick exactly which route they will take to [their retirement] destination, whatever the destination is that they’ve set their mind to. So they want to be in the driver’s seat and pick the route,” Investment Trends head of research Dr Irene Guiamatsia revealed at the release of the “Vanguard/Investment Trends 2023 Self Managed Super Fund Report”.

“So they want to pick the investments, whether it’s an ETF (exchange-traded fund) or a managed fund, they want to be able to also opine on which ETF or managed fund is in their portfolio, is really what SMSF investors mean by desire for control.”

Guiamatsia took the opportunity to point out the sense of control SMSF trustees were seeking did not translate into seeing them make constant revisions to their fund portfolios.

“When we actually observed the behaviour of SMSF investors, what we did notice is that they don’t actually rebalance [their portfolios] that often. They don’t trade so actively,” she noted.

“So yes [they want to be] in the driver’s seat, but perhaps [they’re not] really driving too much at this stage.”

Apart from the desire to have more control over their investments, she said the report found the belief they have the ability to achieve better returns, 37 per cent, and they can make better investment decisions, 32 per cent, than public offer super funds as the other two primary factors motivating people to set up their own SMSF.

The “Vanguard/Investment Trends 2023 Self Managed Super Fund Report” analysed the responses of 2290 SMSF members who participated in an online survey conducted across February and March. It marks the 18th edition of the study.

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