Advice key to stemming SMSF leakage
APRA-regulated funds should look at increasing their advice offerings in a bid to stem member leakage, with Tria Investment Partners labelling product solutions an “incomplete response”.
Speaking at a recent Association of Superannuation Funds of Australia (ASFA) media briefing, Tria’s managing partner Andrew Baker said APRA-regulated funds focusing on products to stem member leakage is insufficient.
“Don’t just make this a product issue,” Mr Baker said. “Part of the answer is a product response. But it’s not the whole story and it’s a mistake to see it in those terms.”
Mr Baker said APRA-regulated funds need to consider their advice capabilities as well as their product options.
“You really can’t have a proper SMSF strategy as a collective fund unless you’ve got an advice capability. It may turn out that you don’t have an SMSF problem, you’ve actually got an advice problem,” he said.
“Even though a lot of SMSFs are self-directed, many get established on the basis of advice, from accountants, from planners - so advice is a critical factor at least half the time, and it plays a role of some sort [for] a majority of the time.”
Mr Baker noted there’s a high correlation between a collective fund’s advice capability and member retention in retirement.
“So perhaps what you think of as an SMSF problem is not that at all, it’s actually a multi-faceted advice problem,” he said.
“You can’t engage effectively with the SMSF issue until you’ve got a sufficiently scaled advice capability. And you can’t serve your older members approaching retirement either, without that being in place.”
Industry unites on model portfolio data standards
More than 20 organisations from across the financial planning industry have coll...
State Street ETF portfolios available on platform
Advisers can now access a new suite of exchange-traded fund model portfolios fro...
FASEA reveals course and diploma approvals
The Financial Adviser Standards and Ethics Authority has confirmed it has approv...