Master trusts dominate, but advisers still using retail super
Thirty per cent of advisers use a combination of master trusts and retail funds when investing the superannuation savings of their clients, while 21 per cent only recommend single manager retail funds and 18 per cent use a combination of retail funds and wrap accounts.
These are the keynote findings of the latest survey byRothschildinto the recommendations of advisers when it comes to superannuation.
Conducted last year as part of Rothschild’s own product development research, the survey had a 6 per cent response rate, representing 223 of the 3,700 planners surveyed.
According to Rothschild Australia Asset Management’s senior manager superannuation Michael Davison, while the survey results indicate a huge slant towards master funds in recent years, there are still 20 per cent of advisers who don’t use master funds.
“It shows there is a market for managers that do their own products. We have a strong presence in the master fund market, but it shows there is still a place for retail products,” he says.
The report reveals that two thirds of the planners use single retail funds for smaller amounts of less than $100,000, while master funds and wraps are more likely to be recommended for larger amounts exceeding $100,000.
The study also found that 45 per cent of planners recommend self-managed superannuation funds to more sophisticated clients looking for greater control of their investment or to invest in direct shares or property.
The biggest influence on a planner’s recommendations in selecting superannuation products for their clients comes down to investment performance, ease of administration and being able to access a broad range of investment choice, the study found. Secondly important was fee structure and the level of fees charged.
The report also identifies commissions as the main form of remuneration for advisers who recommend superannuation products, with planners keen to recommend nil entry fee type products.
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