The self managed super fund (SMSF) market has experienced a dramatic shift away from direct equities with clients steering their investments into managed funds, new research has found.
According to the AMP Capital and Investment Trends 2007 Self Managed Super Funds Investor Report, 24 per cent, or 80,000 SMSFs intended to invest in a managed fund in the next year with an additional 43 per cent considering managed funds as an option.
“What’s changed is that planners have been more successful lately at encouraging SMSF clients to use managed funds and use investment platforms as well,” Investment Trends principal Mark Johnston said.
“Traditionally SMSF have been very oriented towards direct equities. Half of SMSFs using advice are much more likely lately to have been making investments into managed funds and into platforms.
“This is a very large shift in the way money is being invested.”
The report was launched at the same time as the 2007 SMSF Planner report which found accountants and financial advisers were servicing a larger slice of the SMSF.
Johnston said 44 per cent surveyed have spoken to an accountant, while 35 per cent have spoken with a financial planner and 13 per cent said they’ve spoken to a superannuation consultant specialist. In total 42 per cent said they have seen a financial adviser, he said.
“That’s a really big number in the context of the previous report only a third of SMSFs were using a financial planner at the end of 2005 and the beginning of 2006,” Johnston said.
“So you’ve got 42 per cent of SMSFs talking to a financial planner as a result of the super changes which has led to a massive spike in the number currently using a financial planner.
“So it’s still behind accountants, but it’s a very dramatic increase.”
Johnston said the increase use of financial advisers is likely to stay with the report revealing 28 per cent said they are still needing help with investment advice.
“Planners are advising more SMSFs clients but they are advising more clients that have come from outside their traditional client base,” he said.
Referrals from accountants, other clients, and other acquaintances were the main areas where new clients were being sourced.
More than 2100 SMSF investors completed the SMSF Investor Report in May 2007.
More than 408 financial advisers completed the SMSF Planner Report in February 2007.
