Conventional funds can meet SMSF needs

The actions of conventional superannuation funds may have given rise to the growth in self-managed superannuation funds (SMSFs).

That is one analysis delivered to the Association of Superannuation Funds of Australia (ASFA) national conference earlier this month, but Institute of Chartered Accountants SMSF specialist Liz Westover believes there are a number of reasons for growth in the sector.

Westover said that included among these is the growth in share ownership generated by demutualisations and privatisations in Australia, as well as recent stock market volatility.

"During stock market volatility when superannuation fund balances were declining, many Australians resented 'paying' someone else to lose their money and preferred to have a go at obtaining better returns themselves," she said.

Westover said other types of funds had been inflexible and lacked choice around investments and options in retirement.

However she said there had been an improvement with respect to larger funds in recent years in terms of meeting their members' needs and providing them with choices and flexibility.

"Larger funds have a great opportunity to offer up the benefits of SMSFs, without the responsibilities of being trustee," Westover said. "If they can maximise these opportunities, they become a very attractive option for Australians saving for their retirements."