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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.”