I just realised it must be two years or more since I've been commissioned to write a superannuation article on anything other than self-managed super.
I used to be asked regularly to write about industry super funds, whether they were better than retail or wholesale offerings. Over the years I've written heaps of stories on super fees, super advice, how to select the right investment option, how to kick start, clean up and push forward your retirement savings.
Not recently, the only topic commissioning editors have been interested in for the past couple of years has been self-managed super.
According to SPAA, the SMSF sector's professional association, self-managed super is the fastest growing sector with $292.9 billion under management, "equating close to a third of Australia's $1.23 trillion superannuation industry."
Recent research indicates the sector is expected to continue its strong growth trajectory with one in 10 respondents in a recent survey who don't already run their own super fund indicating they intend to look at setting up an SMSF within the next two years.
Russell Investments managing director of intermediaries, Patricia Curtin calls these investors "coach-seekers". She says they make up 30% of the population but only one in five currently have an SMSF.
Wow! What a fantastic new market for all those intermediaries currently setting themselves up as SMSF specialists and experts.
The danger is that DIY super will be hijacked and turned into something very "off-the-shelf" unnecessarily expensive and providing far less autonomy and control to the trustee than it was ever designed to give. What a pitty that would be.
DIY purists usually don't have a financial planner, or if they do, it's been a strictly fee-for-service arrangement for a very long time. They have time on their hands and a high level of financial knowledge and investment experience. They take a daily interest in the markets and the management of their SMSF portfolio.
They may have help with the administration and compliance side of their fund's operations but they would very rarely abdicate power over investment selection and management to anyone, financial planner, platform operator etc. And they have high account balances, particularly in comparison with amounts held in industry super accounts, for example.
So as the SMSF sector winds up to cater for increasing demand for self-managed funds and as the big publishers write more and more stories about how popular the sector is, investors need to be increasingly wary. Be wary that it is really the right option for you. Be wary of any intermediary promising to make it easy and do your research before you decide to DIY.
