Increased product availability within the MySuper regime is starting to attract ‘choice’ members as well as SMSF trustees, says BT Financial Group.
Speaking at a Trans-Tasman Business Circle luncheon in Sydney yesterday, BT Financial Group chief executive Brad Cooper said the super system will see staggering growth over the next two decades.
"Australians have invested more than $2 trillion in superannuation assets, and at its current trajectory, the system is projected to double to $4 trillion in the next nine years and reach $9.5 trillion by 2035," he said.
Mr Cooper divided the system into three main categories: advised, self-managed and MySuper or 'default' funds.
"We call [MySuper] default because you default there when you have provided no other option," he said.
"But I think people will stay in the MySuper environment because they will be consciously staying in there, leaving decisions to trustees who they believe would make more informed decisions than they otherwise would."
Industry segmentation within the MySuper sector – into industry, retail, and public – will start to "fall away" as the focus shifts to outcomes for people covered by MySuper products, according to Mr Cooper.
Some members with "specific requirements" will start to move out of the 'choice' environment and into MySuper products.
"SMSFs are interesting too – as you get more product availability within the MySuper regime, people will start to look at why they’re in an [SMSF] and maybe choose to go back [to MySuper]," he said.
However, the SMSF sector will also continue to grow over the next two decades.
"That sounds contradictory, but when you see the super system going from $2 trillion to $9.5 trillion there’s a lot of growth in each of those sectors," Mr Cooper said.
"More people staying in MySuper because they’ll start to trust that a lot more – many people will make a conscious decision.
"I think they will move between MySuper operators based on whether or not that MySuper fund’s working for them, based on cost/performance or other attributes."
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