legalsuper caution on SMSF "time bomb"
SMSF trustees are increasingly questioning their capacity to run an SMSF in their later years and are looking at switching to a managed fund arrangement in retirement, according to legalsuper chief executive Andrew Proebstl.
Proebstl described the situation as a "ticking time-bomb" for the industry, with older trustees also worried about burdening their spouse or partner with SMSF trustee responsibilities.
"Often one spouse or partner takes a lead role in managing the household finances, and increasingly we are seeing that these individuals don't want to leave a spouse or partner who has been less involved in running a super fund when they pass away," he said.
"One advantage of managed super funds is they have staff available to answer people's questions and help them manage their super."
Proebstl questioned how many people would want to continue to spend their time keeping up with the ongoing administration and compliance requirements as they aged.
"During the retirement phase, people have different investment risk and return profiles, and refinements in investment strategy will need to be formulated and implemented. In the latter years of life, individuals may be less interested or equipped to make these decisions," he said.
Proebstl said legalsuper has experienced older SMSF trustees closing their fund and switching to legalsuper, a trend he expected to increase as baby boomers moved through to retirement.
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