Spike in SMSF enquiries among superannuants: CPA

CPA Australia members are reporting a significant increase in enquiries from superannuants about setting up self-managed super funds (SMSF), according to CPA Australia superannuation policy adviser Michael Davison.

“We’re certainly getting feedback from our members that they are getting a lot more enquires from investors wanting to establish SMSFs.

“This suggests investors are asking the question, although ATO [Australian Taxation Office] statistics suggest they haven’t actually moved yet — but history suggests that we’ll see an increase this year, probably before the end of the financial year.”

If a spike in SMSFs does occur it will be in line with a trend in the previous two stock market downturns, where there was a flight into SMSFs, Davison said.

“It appears that in bad times, when investors are getting negative returns and still paying fees, they develop a mindset that they can lose money for themselves without having to pay fund managers for it.

“It will be interesting to see whether we have a spike again or if there is recognition that their poor returns this time around is part of a global downturn that is all-encompassing.

“You’re not going to avoid its implications by investing for yourself.”

Davison said it would also be interesting to see whether advisers are in a better position to talk people out of establishing SMSFs as a knee jerk reaction to poor super fund performance.

“It would be unfortunate to see people jumping ship from their super fund to establish a SMSF only to crystallise their losses or miss out on any potential upside opportunities if and when they come.”