Industry funds keep battling SMSF appeal
Another industry super fund has released a direct investment option (DIO) to its members in a bid to prevent the flight to self-managed super funds (SMSFs).
CareSuper is the latest fund to launch a DIO in response to the needs of the so-called "independent investor" — weeks after Club Plus Super launched its DIO and after AustralianSuper's revamped direct offer.
CareSuper chief executive officer Julie Lander warned that many SMSFs were not aware that administrating a fund was fraught with risk and also costly, particularly if there was advice involved.
"Many investors attracted to establishing an SMSF have little understanding of ongoing compliance costs and the severe fines they potentially face if they don't comply with a raft of complex regulatory requirements," Lander said.
"Further, if the SMSF is managed for them by an adviser, then additional costs are likely," she added. "What brings this cost into question is that a majority of SMSFs are invested in cash, term deposits and Australian equities."
AustralianSuper's product manager of investments Paul Souter said at a conference last year that SMSF rollovers represented about 5 per cent of the fund's members and 15 per cent of funds.
Earlier this year, HOSTPLUS announced it would change its legal structure to allow SMSFs to invest in its underlying investment platform, while Equip Super Financial Planning recently trained its financial planners on advice in this particular area.
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