Poor performance pushing investors into SMSFs
The recent poor performance of the funds management industry and the way it is being portrayed in the media is pushing investors out of managed funds and into the self-managed super fund (SMSF) space.
“I think people are shying away from managed funds products at the moment; they read the press and they get spooked. And, of course, a lot of managed funds have been frozen, whereas equities [and] direct equities aren’t being frozen,” said the principal and head of superannuation services at WHK Group Horwath, Chris Malkin.
Investors were also shying away from commissions that they perceived to be associated with investments in managed products, Malkin said.
“I think there’s a lot of scepticism in the marketplace at the moment about whether or not managed products will generally achieve the retirement objectives of the retirees,” he said.
“I think there is no doubt that the recent turmoil, and some of the bickering in the industry É do cause consumers to stop and think,” said the managing director of Snowball Group, Tony McDonald.
The investment industry saw a jump in the number of self-managed super funds (SMSF) created in the March to June quarter of this year, according to research on SMSF investment trends released by Investment Trends.
Over 10,000 new SMSFs were created in that period, a rise of almost 4,000 over the previous quarter.
However, the percentage of SMSFs using financial planners has dropped by more than 10 per cent in the May to June quarter, and the percentage of financial planners advising SMSF investors has grown only slightly over the last three years, from 72 to 75 per cent.
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