Returns and fees at centre of SMSF growth

22 October 2013

The migration from retail and industry superannuation funds to self-managed superannuation funds (SMSFs) is being driven by perceptions of poor investment performance and fees, according to the latest research released by Roy Morgan Research. 

The research, released last week, also confirmed that those who made the move to SMSFs remained generally happy with their choice, with advisers representing a key part of the equation. 

Commenting on the research, Roy Morgan industry communications director Norman Morris pointed to the fact that members of retail funds were more likely to migrate to an SMSF than members of industry funds and that fees and performance were the underlying reasons. 

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"Our research shows that the major reason that people are switching to SMSFs are associated with poor investment performance and the level of fees and charges and, as a result, their funds are moving from retail and, to a lesser extent, industry funds into SMSFs," he said. 

"The ease of switching super funds and the increase in people using SMSFs means that the retail sector will increasingly rely on their adviser network to retain customers," he said. 

"The relatively poor long-term performance of the retail funds, however, is of concern as there is a very clear fiduciary responsibility for financial planners to act in the best interest of their clients, and yet financial planners are more likely to direct their clients to retail funds," Morris said. 

Originally published by SMSF Essentials.

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