Inadequate SMSF asset allocation raises concerns
Research released at the SMSF Professionals' Association of Australia (SPAA) conference has raised concerns that more than half of self-managed super fund trustees are not altering their asset allocations to a more defensive position as they move into retirement.
Chief executive of Russell Investments in the Asia Pacific, Alan Schoenheimer, revealed that only 43 per cent of trustees indicated that they were changing their asset allocation in retirement or planning to do so, according to the Russell/ Coredata research.
That was an inadequate number of people preparing for the flow into and through retirement, Schoenheimer said.
Currently, trustees can receive tax-free income when they move into retirement, and that alone should give cause to think about whether the asset allocations in the fund should change, he said.
Contributions coming into the fund are also going to be dramatically curtailed during these years, he said.
Trustees need to be nudged along and made to consider alternative asset allocations as they near retirement, and this would give advisers the opportunity to demonstrate value-add, especially with such a big change in trustee's situation, Schoenheimer added.
The strong preference for domestic equities and cash would lead to under-diversified portfolios in the long run, he warned.
Recommended for you
Data and technology provider Novigi has acquired Iress’ superannuation consulting and managed services business from Apex Group.
AMP is to launch a digital advice service to provide retirement advice to members of its AMP Super Fund, in partnership with Bravura Solutions.
Unveiling its performance for the calendar year 2024, AMP has noted a “careful” investment in bitcoin futures proved beneficial for its superannuation members.
SuperRatings has shared the median estimated return for balanced superannuation funds for the calendar year 2024, finding the year achieved “strong and consistent positive” returns.
