Industry superannuation funds should consider establishing self-managed super fund (SMSF) divisions to stem the departure of members, according to SMSF Strategies principal Grant Abbott.
"Industry funds need to put in place an SMSF division. If you can't beat them, join them," Abbott said at the SMSF Strategy Day 2012 in Sydney on Monday.
Abbott is due to speak at the Australian Institute of Superannuation Trustees conference on the Gold Coast later this year about why members leave super funds.
"The primary reason is control; people join SMSFs for control," he said.
He said funds should train advisers or hire advisers who were already SMSF specialists and enable them to set up SMSFs.
"I would probably set one up whereby I might get some experienced SMSF advisers already and bring them into the industry fund umbrella," he said.
"Alternatively, they may well put their guys through an RG 146 course and get them licensed and start offering self-managed super fund services to their members."
SMSF trustees can then leverage off the industry fund's expertise for investment options, an option that might be especially attractive for funds that have substantial in-house investment management teams.
"What you do is moving into that wholesale funds management and offer that to your clients," Abbott said.
He said he did not believe the efforts to offer members a direct investment platform, such as AustralianSuper's Member Direct service, would stop the outflow to SMSFs.
"We've done a lot of surveys of our SMSF members and the question was: 'Would you move out of your self-managed super fund to a member direct [option] which has exactly the same investments?', and they all said no.
"Mainly because they still want control and they want to see their own name on the line.
"I still think that industry funds need to get a member direct, but I also think they need a true SMSF division."
A number of industry funds had been playing with the idea of offering SMSF services, he said.
Last year, he trained three advisers from Auscoal Super on SMSF issues, but Auscoal has not taken the step to offer these services.
"Advisers need to know about [SMSFs] to help them provide advice to clients, but there are no plans to develop specific services," an Auscoal spokesperson said.
NGS Super chief executive Anthony Rodwell-Ball was one of nearly a dozen industry fund representatives who attended the SMSF Strategy Day.
Rodwell-Ball told Investor Weekly that Abbott had made a good point, but much would depend on the implementation.
"He's right; but the devil's in the detail," he said.
