Where DIY super is heading
27 February 2014
A presentation of a survey by SPAA and Russell Investments provides an interesting insight into DIY super investors. It is worth running through the results.
One thing of interest is that the rule changes to financial advice, Future of Financial Advice (FOFA), does not seem to represent a big change in fee structure. About 56% of advisers expect no effect to fee structure, while 38.5% have advised clients of fee changes and 4.4% have "not got round to it". It hardly seems to presage a large shift in fees.
SMSF investors are very much hands on. The majority of trustees prefer to drive investment process (51.9%). Only 12.7% value investment strategy information, which is where financial planners have a role, especially in diversifying portfolios. About 42% of SMSF trustees have a dedicated adviser and 98% of SMSF trustees have a dedicated accountant/administrator. Just over half turn to financial media when making financial decisions and a fifth have never used an adviser
SMSF trustees value investment expertise in their advisers:
Trustees are also becoming more confident about their super. They are almost twice as confident (67%) as non-trustees (34%):
The emphasis is very much on low risk with trustees of DIY funds (79%). They have about a third each in shares and cash:
The report gives reasons for the cash allocation: 43% waiting for better opportunities, 29% are reducing risk. Close to half have not changed cash allocation in past year. When it comes to other options: 64% looking to Aust shares and 38% to residential property. Three in four achieved a positive return in past 12 months, while 15% said they don’t know.
Of the positives, one in three had >15% return. Half value their unlisted investments every 2 years or more: 34% value once a year. Accurate calculation of total portfolio performance remains a critical issue.