A growing number of self-managed super fund (SMSF) trustees are questioning their capacity to run their own fund in their older years and are actively looking at moving to a managed fund as they approach retirement, according to Andrew Proebstl, chief executive of legalsuper, Australia's largest super fund dedicated to the legal sector.
Mr Proebstl said the trend could be a 'ticking time bomb' for the industry, with older SMSF trustees approaching legalsuper worried about their ability to continue to operate their own fund, as well as burdening their spouse or partner with the responsibilities.
"Australia's baby boomers are moving through to retirement and many are weighing up whether they will have the capacity in their older years to manage their own fund," he said in a statement.
"Often one spouse or partner takes a lead role in managing the household finances and increasingly we are seeing that these individuals don't want to leave a spouse or partner who has been less involved in running a super fund when they pass away.
According to Mr Proebsti, one advantage of managed super funds is they have staff available to answer people's questions and help them manage their super - in most cases funds do not charge for an initial consultation or short conversation.
"Ongoing and efficient administration is critical to the success of any super fund and just as much so with a SMSF. Extensive compliance requirements prevail that change over time. As people age, how many will want to spend their time keeping up with these requirements?
"During the retirement phase, people have different investment risk and return profiles and refinements in investment strategy will need to be formulated and implemented. In the latter years of life, individuals may be less interested or equipped to make these decisions," Mr Proebstl said.
