SMSF Adviser first learnt NGS Super would be launching tools such as these late last year, after chief executive Anthony Rodwell-Ball expressed concern that some investors may be seeing SMSFs as a “fashion accessory” and are not appropriately considering the associated risks.
Mr Rodwell-Ball said the new ‘SMSF Profiler’ is an “online, multiple choice questionnaire that assesses an individual’s suitability for managing their own SMSF across pivotal areas”.
The tool’s disclaimer states that the assessment does not take into account personal objectives or financial situation, with conclusions based on “a range of assumptions and methodology”.
Speaking to SMSF Adviser, manager of marketing and strategy Lisa Samuels said based on research conducted on NGS Super’s members, the fund has “concern [individuals] don’t fully understand their decision to establish an SMSF’.
In addition, Ms Samuels said there has been strong interest among the fund’s members in regard to setting up SMSFs.
“We sent some information out to a group of members, and more than 10 per cent of that group of members went and used the tool,” she said.
Ms Samuels said that through the tool, NGS Super wants to provide members with a “balanced view” on whether an SMSF is appropriate for them.
“We’re not saying SMSFs are good or bad; we’re just saying there’s information you need to understand,” she said.
“There are different outcomes about their suitability and different messages about their suitability; basically the response people receive is customised to how people answer the question.”
Individuals who are deemed ‘suitable for an SMSF’ after completing the assessment are then directed to an advertisement for NGS Super’s financial planners.
Despite this, however, Ms Samuels stated that NGS Super’s advisers would not advise a client to actually establish an SMSF or advise them on how to establish one.
“We have an arrangement with a third party that would help facilitate that, so it wouldn’t be one of our advisers, but we could, if a member decided that that was the right decision for them, then we would refer them on,” she said.
Ms Samuels could not confirm whether NGS Super was benefitting from this third-party relationship.
She stated no members as of yet have been referred to this third party.
“I mean, if we refer them, then we’ve potentially lost that member [from] NGS,” she said.
NGS Super chief executive, said the multiple choice assessment tool was developed due to the volume of biased & conflicted information about SMSFs in the market. “With so much information out there both encouraging & deterring people from setting up an SMSF, it is incredibly tricky for individuals to understand if they’re right for the job. “We believe that we have the responsibility to act in an ethical manner, educate our members & give them the advice that suits their retirement goals.[personal advice = SOA]”. Those fund members that have shown strong interest to set up a SMSF were they talked out of it or advised out of it as a result of his tool. This tool is giving personal advice despite all the disclaimers. They also have a referral policy but dont know if there is any kick backs FSG disclosure problems here. The last sentence says it all – if we refer them we lose them as a client thats why no referrals have happened.
I tried it, deliberately trying to indicate unsuitability and got a result that said I was only marginally unsuitable. If one can argue from the specific to the general, it seems reasonably fair.
To be better informed, I took the survey on the NGS website. It ranges from asking questions about current balances, member ages, insurance, contributions and investment strategy; to issues around governance and trustee responsibility.
I think that, considering it doesn’t take into account particular individual factors, as a broad tool it seems fairly useful; especially if you then have a competent advisor/accountant to aid in the setup (and therefore don’t need to meet with one of the industry fund advisors – who are bound to be biased).
A 5 minute tool (note: tool, not checklist) which could be a first stop for people trying to determine if they are suitable.
You should check it out.
I have my own SMSF with in excess of $1M. Compound return over the last 5 years has been 15%pa after all taxes including deferred tax liability(thanks to a very good planner.
Answered the questions honestly and result – unsuitable. LMFAO
More than likely this new “tool” from the Union Super funds will conveniently omit the benefit of not having your life insurance cancelled when the trustee is forced to declare your funds a “lost account” & pack it all off to the ATO. Unlike a SMSF, where you can stop this ridiculous situation from occurring.
Their faux “assessment tool” and the statements of Ms Samuels highlight the fact that they have every intention of herding clients back into NGS at every opportunity. The bias and conflict of interest is so stark, yet there will be no action from ASIC, Choice or the like. All it needs now is a little endorsement from David Whitely and you’ll know its totally compromised.