More SMSF product innovation needed

Consider insurance and education

By Julie May
Tue 07 Sep 2010

Product providers need to get on the front foot in catering to the growing SMSF market.

Product providers need to explore opportunities and be more proactive in building niche products specifically targeted at the self-managed super fund (SMSF) sector, SMSF Strategies principal Grant Abbott has said.

He challenged delegates at the 2010 Wraps, Platforms and Masterfunds Conference last week to deliver an effective, low-cost SMSF investment platform that allowed choice of shares and investments, with or without advice.

"Do not call it a wrap account. It's an SMSF platform. It is a product that is purpose-built only for self-managed super," Abbott said.

He urged product providers to deliver a range of group insurance, as it was the biggest opportunity in the space, and to build SMSF trustee education platforms via the web or direct conferences.

Abbott said industry funds were concerned about losing clients with super balances of around $50,000, so a low-cost, basic SMSF offering could sit side by side with other investments in a client's portfolio and could be set up with $50,000 to $100,000.

"Get them in there, get them involved, and use it as a retention strategy," Abbott said.

He said it wouldn't necessarily attract the interest of a significant amount of members immediately, but would gain traction over time and give clients greater control.

"Members can see what it's like and they might prefer to go back to how they did things previously, but they might also decide to move forward with it," he said.

"You can't sit on your hands and do nothing. The SMSF market is growing 20 per cent per annum and there's a whole lot of opportunity out there to build niche products for this sector."

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