Claims of improper advice behind outflows to SMSFs
If industry superannuation funds want to retain their members, they will need to offer them access to self-managed superannuation fund (SMSF)-like products, according to Deloitte partner Russell Mason.
Participating on a roundtable this week conducted by Money Management's sister publication, Super Review, Mason said outflows from industry funds and other super entities regulated by the Australian Prudential Regulation Authority (APRA) into SMSFs reflected not only the attitudes of those making the move, but also the amount of investment into the SMSF sector injected by major entities such as the big four banks and AMP Limited.
"The big four banks - and you add Macquarie and AMP - have all got substantial entities they own, or are involved with, that benefit from the self-managed fund industry," he said.
"They offer investment platforms, they offer administration etc. From my point of view clearly there's a million Australians with roughly $500 billion in assets that see SMSFs as offering something more than retail or industry funds can offer."
Mason said that instead of viewing SMSFs as the enemy, industry funds needed to better understand what attracted people to them and what could be offered as an alternative.
Earlier the chairman of the Australian Institute of Superannuation Trustees (AIST) and chairman of Media Super, Gerard Noonan, expressed concern at the level of outflows from his fund to SMSFs and suggested it represented a problem for other industry funds and APRA-regulated entities.
Noonan said he was concerned that some of the outflows were occurring as a result of the provision of improper advice.
"I do think that there's some clearly improper advice occurring here because one of the things that we do notice of the cohort of people who leave our fund, well over half have got under $30,000 in their account," he said.
"We do detect that there's some improper advice going to a group of these people who are unswayable, even though they've got a relatively small amount in their superannuation account, because they've decided to make the move."
Recommended for you
AMP is to launch a digital advice service to provide retirement advice to members of its AMP Super Fund, in partnership with Bravura Solutions.
Unveiling its performance for the calendar year 2024, AMP has noted a “careful” investment in bitcoin futures proved beneficial for its superannuation members.
SuperRatings has shared the median estimated return for balanced superannuation funds for the calendar year 2024, finding the year achieved “strong and consistent positive” returns.
The second tranche of DBFO reforms has received strong support from superannuation funds and insurers, with a new class of advisers aimed to support Australians with their retirement planning.
