Confidence leads to small super fund growth

Tower Trustsays the recent strong growth in small super funds has been largely driven by increasing investor confidence in a poor performing environment.

Tower Trust manager of superannuation services Peter Burgess says in the current climate, investors want more control over where and how their super money is being invested.

As reported in the last edition of theAustralian Prudential Regulation Authority’s Super Trends survey, small super funds with less than five members experienced a $2.5 billion growth spurt in the March quarter, defying an overall national slump.

The 2.4 per cent rise in the assets of small super funds in the past three months compares to a decrease of $8.9 billion, or 1.7 per cent, of total Australian superannuation assets for the same period.

Burgess says the growth in small super funds is further evidence that investors, tired of poor performing funds, are confident they can do a better job themselves.

“The view out in the community is that people are getting very tired and concerned about continuing poor superannuation returns,” Burgess says.

Burgess says that investors are also being drawn to small super funds by a desire for greater investment flexibility as well as estate planning and tax minimisation advantages, as small super funds can provide exposure to direct property not always available through a master fund or other type of super fund.

“Investors have also been wanting to get a piece of the booming property cycle and they are now doing this through their super funds,” he says.