SMSFs can coexist with conventional super funds
As the competition between self-managed super funds (SMSFs) and the more mainstream industry and retail super funds continues to evolve, the solution for many Australians may lie in balancing both options, according to Russell Mason, partner – superannuation for Deloitte.
“I think there’s been a general recognition that SMSFs are here to stay, that there is something that nearly one million Australians find is better met in an SMSF environment than in the bundled environment of a retail or an industry fund,” he said.
“And so we’ve seen a number of industry funds and retail funds introducing an ASX200 option, introducing a term deposit option.
“And while I think that’s part of the solution, funds still need to understand what it is that people who are attracted to SMSFs are really looking for and to come up with a suitable solution.”
Indeed, Mason said that for many industry and retail funds, it may be even be necessary to acknowledge that they can’t.
“If geared property is what you’re looking for, if having the ability to have flexible investments in small cap stocks is what you’re looking for, then yes, you can’t do that within a traditional industry, retail or public sector fund,” he said.
“However, if these funds accept that they’re here to stay, accept that they can offer part but not necessarily all of the solution, the question is how can they work together?”
And for Mason, a blending of both DIY and mainstream super is entirely possible.
“So, is one of the solutions that Joe Bloggs has part of his money in a self-managed fund where he’s got his geared property and his small cap stocks and then another proportion, perhaps a bigger proportion, in a not-for-profit or retail fund where you can have your indexed equities, your international equities, your infrastructure, your fixed interest?” asked Mason.
“Perhaps you’re going to see a lot of people blend the two together, that might itself be the solution.”
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