It may be too early to say that we are done with the conventional Super funds but by the look of it, we are surely getting increasingly enticed by the SMSFs. The industry has well and truly emerged as the fastest growing Superannuation sector. In fact, $557 billion out of the entire $1.9 trillion sounds to be some figure to boot home.
Australia leaning towards SMSF
Australians are putting their faith unequivocally in the self-managed Super funds. Despite SMSFs being the funds asking for the highest fee, there is no dearth of people who report complete satisfaction with where they are placed at the moment. In actuality, traditional funds lose out due to the kind of perception people have about them. Put another way, they may have to do some groundwork before consumer sentiment shifts in their favour, and there is no denying that this ‘sentiment’ is a key market indicator.
Value for money
Those holding SMSFs do not mind higher fees because they associate value with the SMSF experience. To a majority of them, the fee is a minor charge to pay for the kind of service the sector offers.
Lack of prudential regulations
In absence of prudential regulations, every possible effort is made so that the SMSF industry does not fall in a nefarious trap. There is already the ATO penalty regime that has kicked off in the month of July last year and now there are recommendations from a premier body seeking restrictions in/alteration of limited recourse borrowing arrangements of the SMSF. How these changes shift the dynamics of the SMSF sector remains to be seen.
