Average SMSF balance now exceeds $1 million
The annual Vanguard/Investment Trends self-managed super fund (SMSF) report has revealed the sector's continued growth, both in terms of the number of fund establishments and funds under management.
Commenting on the report, Eric Blewitt, chief operating officer for Investment Trends, said the average SMSF balance was now above $1 million.
"Strong growth in this sector continues, with the establishment of new funds running well above the five-year trend," he said.
"This report shows the main driver for this growth is the desire for investors to gain control of their portfolio, coupled with an effort to save money on fees," he said.
The report also found that SMSF investors continue to be wary of current market volatility.
According to Investment Trends, cash allocations currently represent 28 per cent of total average holdings at $130 billion, of which $49 billion is described as "excess cash" that would otherwise have been invested into other asset types.
Of similar note, was SMSF trustees' concern over fees. This, coupled with a continued desire for control, was cited as the main factors in a 9 per cent decline in the use of financial advisers within SMSFs.
Robin Bowerman, head of corporate affairs and market development for Vanguard, said that SMSF investors had simply become far more attuned to the fees they were paying.
"They are also more engaged in the makeup of their portfolios since the global financial crisis," he said.
"Higher volatility and lower returns have focused investors on the things they can control within their investment portfolio.
"We see opportunities for advisers in adapting to the way this sector tends to value advice, which is to use advisers as a sounding board for decisions and in a coaching role, rather than the traditional role of setting the product choices for the whole portfolio," he said.
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