Evidence SMSF trustees are erring on investment decisions
More than 60 per cent of self-managed superannuation fund (SMSF) trustees rely on their own research to drive investment decisions, according to new analysis released ahead of the SMSF Professionals' Association of Australia (SPAA) national conference beginning in Melbourne today.
The analysis, derived from research commissioned by Russell Investments and SPAA and undertaken by CoreData, suggested that financial advisers could play a key role in assisting SMSF trustees with their asset allocations, yet also confirmed the desire of those trustees to exert their independence.
The analysis said evidence of SMSFs' desire for control of their superannuation and investment decisions was indicated by the fact that 58.8 per cent of trustees claimed they had strong or very strong knowledge of investments, with most (61.6 per cent) relying on their own research to drive investment decisions.
Russell Investments Asia Pacific chief executive Alan Schoenheimer suggested, however, that the lack of portfolio diversification within SMSFs was likely to mean the trustees' research was failing to identify opportunities for accessing asset classes such as international equities.
He said international equities returned 19.1 per cent in 2012, yet SMSF trustees on average only had a 6 per cent allocation to the asset class.
"There is an expansive investment universe on offer through exchange-traded-funds (ETFs) or managed funds which offers SMSFs diversification across multiple asset classes and, for those who seek it, direct ownership," Schoenheimer said.
"Financial planners may need to start broadening their advice services to include competency in new adaptive investment opportunities and other direct asset classes to provide strategic guidance to SMSF trustees and bridge the gaps in knowledge," he said.
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