The majority of Australians who switched to SMSFs in the last three years were urged to do so by professional financial advice, according to new research by Roy Morgan Research.
The results from the Roy Morgan Single Source survey show that in the three years to November 2015, the average amount of superannuation switched per year was over $35 billion.
Of those switching to SMSFs, 75 per cent said they received professional advice from a financial planner, adviser or accountant. Meanwhile, 13.4 per cent said they took the advice from friends and family and 3.0 per cent listened to their employer.
About 15.9 per cent of those who switched to an SMSF did not receive advice, the report said.
In addition, the survey found that the average superannuation balance of those seeking professional advice was $233,000, compared to $109,000 for those who received no advice and $96,000 for those who received advice from employers.
The report notes that the median super balance of those receiving professional advice was $104,000, which shows that only this group have a balance above $100,000.
"This indicates that many of those not receiving any advice or just advice from their employer could benefit from professional advice, as around one quarter have balances over $100,000," the report said.
These results were part of the report which also found that most Australians who switch to industry superannuation funds do not get any independent financial advice.
Norman Morris, industry communications director for Roy Morgan Research, said: "Given the complex nature of superannuation, the lack of consumer engagement, poor understanding and low confidence in the system, it is vital that more people get advice when making decisions about switching their fund.
"With over $35 billion in superannuation being switched every year, this represents a major opportunity for the industry. The challenge is to ensure that people switching their superannuation realise they'd generally be better off getting advice, and that they can feel confident in their adviser."
SUBSCRIBE TO THE IFA DAILY BULLETIN
- 11:30Advisers key to ‘living the dream’: FPABy Staff Reporter
- 11:26US IFA history repeats itself in AustraliaBy Killian Plastow
- 11:30Licensees need greater scrutiny, PJC hearsBy Larissa Waterson
- 18 Aug 2017ASIC permanently bans former AMP adviserBy Staff Reporter
- 18 Aug 2017IRESS announces first half resultsBy Jessica Yun
- 18 Aug 2017Banks the key to closing advice gap, Tria saysBy Larissa Waterson
- view all