Financial planners who are planning to move into the self-managed superannuation fund (SMSF) space must include services around direct equity advice if they wish to attract clients, according to SMSF specialists Heffron.
Heffron director Ben Smythe said many SMSF investors are attracted to this type of fund because of the control and transparency the funds can provide.
Smythe said he believes direct equities are the most complementary asset class for SMSFs.
Furthermore, he believes there is likely to be a shift away from managed funds towards equities as investors take an increasing interest in their super and its underlying investments.
“Direct equities are a necessity for SMSFs,” Smythe said.
“If you’re looking to get into the SMSF space and don’t have some sort of direct equity exposure then you’re going to struggle to provide that control and transparency that clients are after.”
Smythe said that managed funds struggle to provide the right environment for SMSF investors, and that in his experience, only “very rarely will a client drive [investments] in managed funds”.
He said that while managed funds “do have a place in SMSFs”, particularly in regards to gaining exposure to international equities, for example, an adviser with an exclusively managed fund offering may struggle in this space.
Heffron, led by Ben Smythe and Meg Heffron, has been providing a range of technical support to SMSF advisers and accountants for more than a decade.
Heffron has just formed a relationship with ASX-listed portfolio administration provider, Praemium. Heffron offers technical support and other services to SMSFs while Praemium has portfolio administration and market data services.
Praemium also offers separately managed account technology for its Australian and UK clients. The group administers more than $26 billion in its administration services.
