The “haemorrhage” of members to SMSFs and other self-directed super options reveals an industry preoccupied with its default system obligations, according to Rice Warner.
Nathan Bonarius, a Rice Warner consultant, questioned in an opinion piece what the “opportunity cost” of developing sound default strategies for superannuation fund members has been to the broader superannuation industry.
“New evidence shows a harsh reality that the industry’s recent preoccupation with MySuper may have seriously impeded the focus on superannuation’s main game, members with the option to choose their fund,” Mr Bonarius said.
“To focus product development solely on MySuper, at the expense of choice, has created certain commercial limitations.
“A quick look at the rapid rise of SMSFs, which represent one-third of total industry assets, tells us that some one-million fund members are now managing their own retirement savings, despite a general lack of investment expertise and certainly the absence of any scale benefits,” he added.
Mr Bonarius also highlighted some statistics from a recent Rice Warner study, providing some insight into super members' activity and preferences as they age.
For example, only 10.5 per cent of members aged under 25 select their own investment, but this rises to 29 per cent by age 65.
The study also found allocation to growth assets falls linearly with age from 72 per cent to 42 per cent by age 65.
The largest group of Australians who could be impacted by changes to franking credit refunds are members of large super funds, according to ...
A global life insurer has launched a research program with the University of Oxford to look at new approaches to income protection for more ...
A 20-year projection of different income levels confirms that lower earning retirees will be hit hardest by the ALPs proposed removal of fra...