Recent discussion within the super industry has suggested SMSF growth is “exponential and explosive”, David Barrett, Bravura’s principal consultant, portfolio solutions, told InvestorDaily sister publication SMSF Adviser.
However, Mr Barrett indicated such suggestions are “separate from reality” and not a true reflection of the SMSF sector’s actual growth patterns, which have been on a steady upwards trajectory for the last eight years, according to Australian Taxation Office (ATO) data.
“If we [examine] the actual growth in the number of SMSFs using data provided by the ATO, we see that the rate at which people are starting their own funds can hardly be described as exponential,” Mr Barrett said.
“Indeed, the figures indicate a steady and predictable rate of growth over a long period of time.”
Inaccurate suggestions about the sector’s growth risks create a misleading impression that SMSFs are “flavour of the month” with limited long-term prospects, Mr Barrett added.
“This allows participants in the traditional managed fund-driven super sector to be critical of SMSFs, dismissing them as a short-term fad being promoted by self-interested parties,” he said.
The steady growth of SMFSs in fact represents a “fundamental shift” in the super sector, with investors increasingly challenging the fund manager-driven super fund model, Mr Barrett added.
“Starting a self-managed fund is beginning to be seen as the next logical step for average, mainstream Australians, once they’ve built up a reasonable retirement nest egg,” he said.
“Investors have realised they can take direct control of their retirement savings and engage with advisers and fund managers on their own terms.”
