SMSFs proving a one-way street

superannuation-funds/self-managed-superannuation-funds/funds-management/SMSFs/APRA/research-and-ratings/investment-trends/australian-prudential-regulation-authority/default-funds/SMSF/cent/

12 September 2013
| By Staff |
image
image
expand image

Superannuation funds which lose high balance members to self-managed superannuation funds (SMSFs) are probably finding it a one-way street, with little likelihood those members will return, according to new research released by Investment Trends.

According to the research, around one million Australians changed superannuation funds in the past year, 6 per cent of whom moved to an SMSF. However, of these, less than 1 per cent migrated back to funds regulated by the Australian Prudential Regulation Authority (APRA).

Commenting on the research, Investment Trends senior analyst Uwe Helmes said it represented a "one-way valve".

"Once members start an SMSF, they rarely ever go back," he said.

However, Helmes noted that the research also showed that the majority of members who were considering setting up an SMSF in the future had said there was something their super fund could do to prevent them from leaving.

The Investment Trends research also highlighted the importance of default funds, noting that 69 per cent of super fund members were still in a fund they kept from a previous job or the default fund their employer put them into.

"Half of those who set up a super account over the last two years chose their employer's default fund," Helmes said. "The default fund still gets the lion's share of the new entrants to the labour market and those who change jobs, so it's critical for both industry and retail funds to own that space going forward.''

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months 2 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months 3 weeks ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months 3 weeks ago

ASIC has suspended the Australian Financial Services Licence of a Melbourne-based financial advice firm....

1 week 1 day ago

The corporate regulator has issued infringement notices to three AFSLs whose financial advisers provided personal advice to a retail client while unregistered....

1 week 6 days ago

ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test....

2 weeks 4 days ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND