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LJ Financial Group
10th September 2012

Australia’s Self-Managed Superannuation market (SMSF) is booming. With assets of over $400bn, the SMSF market is now the largest sector of the nations $1.4 Trillion Superannuation Industry. With the fees for administering SMSF’s falling, the fastest growing demographic in the SMSF landscape is now 30-45 year olds, with over 1000 successful, hard-working Australians taking control of their superannuation each month by going down the SMSF route.

The growth in the SMSF market has been driven by a number of factors. The primary reason, cited by over half of SMSF trustees has been the desire to control their own investments. Other factors driving the growth in the market include

• Significant reductions in both the costs and administrative burden of running a SMSF
• Growing frustration with the lack of service and transparency from traditional superannuation providers
• Continuing poor returns in ‘default’ superannuation products, with many underperforming cash since the turn of the century

All of these factors are driving Australians from all of walks of life to open up a SMSF, with the attached article providing some additional insight into the ‘typical’ SMSF trustee.

With continued volatility in markets, and ongoing economic uncertainty, now is an opportune time for individuals (and families) to consider SMSF. The default super funds that over 80% of Australians are invested in still have largely the same investments as they did leading into the GFC. There is therefore a risk that the losses which burned the majority of Australians back in 2007 and 2008 could be repeated. Working with a trusted advisor both to set up an SMSF and build a more diversified portfolio can have many benefits for those who take the appropriate action. Even a 1% return difference per annum will multiply into hundreds of thousands of dollars of extra retirement income for high income earners in their mid-late 30’s. These are the people that are most going to need their superannuation upon retirement, as the government will find it increasingly difficult to fund the pension going forward.

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2012-09-17 06:06:39

Source: http://ausbullion.blogspot.com/2012/09/self-managed-super-latest-craze.html