Almost half (46.6 per cent) of the 300 gathered financial advisers in attendance indicated that less than 10 per cent of their clients have a self-managed superannuation fund (SMSF) despite the fact that 65 per cent are regularly recommending SMSFs. A further 27.2 per cent said SMSFs are 10 to 25 per cent of their client-load, while only 11 per cent of respondents hit the 50 per cent mark.
“With SMSFs, a lot of advisers have dipped their toe in the water, but there’s still a huge opportunity being missed,” Vanguard Adviser Services head of intermediary distribution Michael Lovett told ifa.
“It’s a market that is self-directed so a lot of advisers can still get into that space,” he added. “The sector is not for everyone, but advisers should think about it as an opportunity.”
Drawing on recently released Vanguard-Rice Warner data, Mr Lovett said only 50 per cent of SMSF trustees have enlisted the services of a professional financial adviser, indicating a “huge opportunity to convert the other half of the market.”
According to the data, there was $133 billion total cash in SMSFs as of mid-2012, with $50 to $70 billion in excess cash, ie. “cash that they normally wouldn’t be holding but are holding for return reasons with term deposits being quite high.”
Mr Lovett said that the eventual movement of this excess cash into investment offers a significant opportunity to advisers.
While trustees value control over investment decision-making, “research suggests they will pay for advice where they feel they are getting value,” he said.
Other findings of the live survey include that 50 per cent of advisers in attendance say they are “hopeful” about investment markets, while 35 per cent are “optimistic,” with only 15 per cent indicating they are “fearful” or “unsure.”
In addition, 82 per cent of attendees said they would be recommending a “diversified portfolio” in 2013, with 9.28 per cent issuing a preference for Australian equities, and only 0.42 per cent choosing term deposits.
These findings reflected Vanguard’s mantra of “diversification and sticking to strategic asset allocation through thick and thin,” Mr Lovett said.