SMSF popularity to continue 'unabated'

Speaking at a media briefing yesterday, HLB Mann Judd director of superannuation Andrew Yee said that SMSFs are beginning to attract younger investors to a larger extent than other superannuation structures.

“With establishment and ongoing costs of SMSFs falling, technology options streamlining administration, and the superannuation member population broadening, the growth and popularity of SMSFs is unlikely to abate any time soon.

“While at least $300,000 used to be quoted as a minimum balance for an SMSF, this has now reduced to, say, $200,000 or even less.

“This has led to a younger cohort setting up a SMSF at an earlier age than their predecessors,” said Mr Yee.

According to Mr Yee, people in their mid-30s and early 40s are beginning to consider their wealth accumulation strategies.

“Many are drawn to SMSFs because of the control and flexibility features they offer.

“Compared with non-SMSFs, the investment options of SMSFs can be broader and less costly. In addition, the investments can be made both directly and indirectly.

“Many investors have turned away from retail funds and industry funds because of dissatisfaction over performance, costs, or lack of transparency,” argued Mr Yee.

In addition to control and cost considerations, having the ability to transfer personally held shares or commercial property into a SMSF is a foremost benefit, he said.

“Quite often this is a catalyst in setting up a SMSF.”