The Financial Services Council (FSC) and UBS have released a joint report on asset management by self-managed superannuation funds (SMSFs). The report, SMSF Insights – FSC/UBS Asset Management SMSF Report, December 2016, found that the percentage of SMSF holders having formal agreements with financial advisers (down from 46% to 42%) has shifted slightly towards those using accountants (up from 25% to 30%). Accountants were also seen as the most trustworthy source of information to help with SMSF decision making (average trust score of 7.1 out of 10, compared with 6.1 for financial advisers).
The report suggests that the sense of control, as well as good returns, are the biggest drivers of people’s overall satisfaction with their SMSFs. The biggest barrier to setting up an SMSF was finding the confidence to manage their own retirement savings (30%), while the pressure of making investment decisions was seen as the most challenging aspect of running their SMSF (31%). The ATO’s compliance rules were also seen as a barrier to setting up an SMSF (19%) and a challenging aspect of running the fund (26%).
The report found that SMSF investments in deposits/cash increased to 74% in 2016 (up from 67% in 2015). Over half of fund holders (52%) used managed funds and there were increases in the level of investment in domestic (51%) and overseas equities (30%). While 20% felt their SMSF would definitely provide them with enough income for a comfortable retirement, another 43% said it probably would. Only 10% said their SMSF definitely wouldn’t provide them with enough income, and 17% said it probably wouldn’t, while 9% were unsure.