Most self-managed super funds are set up by people over 55 who have more than $200,000 in their fund and are highly engaged with their investments, according to a study by UBS and the Financial Services Council released yesterday.
The study shows that most people set up their SMSF because they wanted more control and greater choice in their investments.
The biggest single grouping comes from people moving their money out of industry funds as they approach their retirement years.
Some 40 per cent of people between 55-64 who had SMSFs had moved from having an industry fund, compared with 28 per cent moving from retail funds.
The report shows that over the past 12 months SMSFs have seen a significant shift from holding cash and shares to investing in management funds.
Some 66 per cent of all SMSF fund members are over 55, with 39 per cent of them now retired.
Member engagement with SMSFs was high, with 63 per cent checking their portfolio at least once a month, and 35 per cent checking weekly.
More than 40 per cent of retired people with SMSFs check their portfolio weekly.
“Our report shows that the majority of SMSF owners are engaged with their super, which is great news,” Financial Services Council chief executive Sally Loane said yesterday.
“More than half of the retirees in the survey — 53 per cent — are entirely or mostly dependent on their SMSF to fund their lifestyle while 46 per cent of future retirees expect to depend on their SMSF to fully or mostly fund their retirement.”
Some $590 billion of the $2 trillion in superannuation assets in Australia is held by self-managed super funds, compared with $536bn held by retail super funds and $433bn in industry funds.
The report shows that 60 per cent of SMSFs surveyed had more than $200,000 in their fund, with 35 per cent having more than $500,000 and 15 per cent with more than $1 million.
The report shows that many SMSFs have been set up following advice from financial advisers and the trustees continued to receive some form of financial advice about their investments.
Almost 70 per cent of SMSF members have some form of formal arrangement to get advice from accountants, advisers or banks, while 48 per cent said that it was advice from an adviser that had prompted them to set up an SMSF.
“Despite the ever-increasing popularity of SMSFs, it is interesting to note that over the last 12 months SMSF portfolios have seen a significant shift from holding cash and direct equities towards increasing their investments in managed funds,” Bryce Doherty, head of UBS Asset Management in Australia said.
“This suggests that SMSF investors are looking to invest in professionally managed products which are executed and structured by experienced fund managers,” he said.
Some 20 per cent of the SMSFs had some investment in exchange-traded funds, with another 10 per cent planning to invest in them in the future.
Among SMSF holders not yet retired, 40 per cent said they would like to buy a product that provided an income stream such as an annuity or an allocated pension.
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