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SMSF trustees seeking specialist advice

Peter Burgess

The latest research into the SMSF sector has revealed trustees are specifically looking for specialist advice to help them manage their retirement savings.

The third annual “Intimate with Self Managed Superannuation” report, commissioned by the Self-Managed Super Fund Professionals’ Association of Australia (SPAA) and Russell Investments Australasia and conducted by Core Data, showed trustees were looking for specialist advice and were less interested in a one-stop-shop approach to financial planning.

“The study shows trustees are turning to advice specialists in those areas where they need more assistance, such as tax and compliance. What that suggests is financial planners will need to upskill through education in order to capitalise on this trend towards specialist advice,” SPAA technical director Peter Burgess said.

According to Burgess, SPAA would be fine tuning some of its existing programs to assist advisers in this area.

“A lot of our education is already geared around that enabling practitioners to skill up in those areas and we’ll be doing more and more of that, particularly this year when we’ll be looking to tailor our education even more than we have in the past. Even our accreditation and exams and so forth will be tailored for different professions,” he said.

Following on from this, the study found an increase in the number of trustees looking to receive asset allocation advice from SMSF specialists. The 2012 survey found 22 per cent were now seeking advice in this area, compared to 11 per cent in 2011.

The report showed advisers were anticipating a greater amount of asset migration within SMSF portfolios from existing balances rather than new contributions.

But trustees indicated part of the
problem for them was traditional asset allocation techniques based on risk tolerance, which they felt locked them into an inflexible solution that dominated their entire financial position.

Russell Investments Australasia chief executive Chris Corneil agreed the traditional methods might be inappropriate, but they did not justify the significant cash holding of SMSFs, some as high as 33.9 per cent in 2012.

“The research continues to provide us with great insight into where SMSFs need greater support in managing their funds, and also what educational aspects the industry needs to be considering. For instance, the fact SMSFs believe traditional asset allocations to be too inflexible means there is an opportunity for advisers to look towards more adaptive and active, multi-asset strategies to ensure SMSFs have sufficiently diversified portfolios which will meet their desired retirement outcomes,” he said.

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