Recent Investment Trends research has shown that there is an increasing proportion of SMSF members that maintain their existing industry or retail super fund after establishing their SMSF.
Speaking at a recent CA ANZ conference, Investment Trends research director Dougal Guild said that around 29 per cent of SMSF members still have an account outside of their SMSF.
“We followed that up with a specific question on why they were maintaining those public offer super funds and the key reason was cheaper insurance,” explained Mr Guild.
“Those members are aware of the sort of group insurance arrangements and cheaper insurance premiums that are available through the public offer funds [and] they perceive insurance in the SMSF space as more difficult.”
Mr Guild said some respondents also listed diversification as a reason for keeping some of their superannuation money in an APRA-regulated fund.
“I’m not sure that having multiple super funds is a way of achieving diversification but it does give you a sense of the mindset of some SMSF clients,” he said.
The research also indicated that the types of asset classes that SMSFs invest in has remained fairly consistent since 2007.
“Direct shares continue to be the predominant asset class held by SMSF investors which has been relatively consistent for several years now,” said Mr Guild.
While there has been a reduction in cash and cash products in recent years, this may change over the coming months as a result of the current economic conditions, he said.
While there is now a very small proportion of cyrptocurrency assets, Mr Guild said the majority of SMSF investors don’t have any interest in this particular asset class.
“It will be interesting to see how that plays over time as younger investors establish SMSFs,” he said.
“We know from other research on online investing that younger generations tend to be interested in cryptocurrencies and trading cryptocurrencies so it will be interesting to see if that particular asset class becomes part of a broader asset allocation.”
