SMSFs move to managed funds
New research by AMP Capital and Investment Trends has revealed a significant boost in the number of self-managed super fund (SMSF) investors choosing managed funds in the last 12 months.
Compiled in May this year, just before the ‘simpler super’ legislation took effect, the 2007 SMSF Investor and Planner Report found 24 per cent or 80,000 SMSFs were planning to invest in a managed fund in the next year, while a further 43 per cent had considered it as an investment option.
AMP Capital Investors head of private clients Giles Craig said the report found that of those planning to invest in managed funds, about two-thirds intended to allocate a significant proportion to international assets.
“Diversifying into international investments, including equities, using managed funds is a new direction for many SMSF investors. It is a sensible strategy for those who already hold a solid chunk of Australian equities in their super portfolio,” said Craig.
“The research found SMSF investors are now seeking access to asset classes and management skills that are predominantly available in the form of managed funds.”
The research also showed an increased demand for advice since the change in super legislation, with over 54 per cent of SMSFs using a financial planner compared to only 33 per cent in December 2005.
“The number of planners recommending managed funds to their SMSF clients has increased dramatically. This contrasts with SMSFs that did not seek planner advice. These were more likely to choose listed property trusts and listed investment companies over unlisted managed funds. We have seen this supported by a marked increase in demand for these types of funds,” he said.
The report attributed the spike in numbers to the recent super changes. According to Craig, many SMSFs said the hardest part of running a self-managed fund was keeping track of rules and regulations, but suspects the numbers to level out later on.
The research also showed that accounts as a source of referrals had fallen 23 per cent, while there has been a 69 per cent increase in the proportion of new SMSF clients coming to planners from existing client referrals, now one in five new SMSF clients.
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