The number of SMSF planners being used ‘going nowhere’
The number of self-managed superannuation funds (SMSFs) using a financial planner since 2007 has gone “almost nowhere”.
Micheal Blomfield, Investment Trends chief executive, said this was in a period which saw a doubling of the number of SMSFs.
“There’s 300,000 SMSFs who use some sort of an adviser but not a financial planner, there’s 110,000 who say they don’t use any adviser and around 190,000 SMSF trustees that are using a financial planner,” Blomfield said.
According to findings from the 2020 Vanguard/Investment Trends SMSF investor report, the number of SMSFs with unmet advice needs grew 6% from 315,000 in 2019 to 335,000 in 2020.
“The challenge here is that there is a very big advice need that goes unmet – there’s 335,000 SMSF trustees that say they have unmet advice needs in relation to their SMSFs,” Blomfield said.
The need for advice was “vastly more intense and widespread” than it was even a year ago.
“We’ve seen huge increases, something in the order of 75,000 SMSF trustees who say they need investment strategy portfolio review,” Blomfield said.
“There’s a very large and growing demand for advice across all of the factors of investing: identifying what to buy, protecting assets, investing offshore, and there’s a lot more demand than there was a year ago for advice around exchange traded funds (ETFs).
“Then there’s [demand] around tax and income strategies, so pension strategy, inheritance and estate planning, tax planning, contribution strategies and retirement adequacy issues.
“While the number who need advice is growing and the number who gave advice is falling, the intensity and breadth of advice that they need continues to rise.”
The report also showed the most popular drawdown methods were the bucket approach (53%) followed by income from investments (39%).
Planners rated compliance related issues (46%), client education (33%), and regulatory uncertainty (30%) as the biggest issues they faced.
Over half (53%) of SMSF planners’ client base are in the pension phase.
AUTHOR
Chris Dastoor
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