Industry fund reacts to SMSF threat
The popularity of self-managed super funds (SMSF) has spurred industry super funds to reconsider their investment flexibility, with legalsuper launching a direct investment option for its members.
As Australians increasingly move towards SMSFs, industry super funds are responding with alternatives for their members, including more flexible investment options and do-it-yourself investment capabilities.
Offering an alternative to SMSFs, legalsuper has launched a direct investment option. Andrew Proebstl, legalsuper chief executive, said the direct investment option gives members flexibility to actively invest and build their portfolio.
The move follows HostPlus allowing SMSFs to invest in its investment options, once plans to become a pooled superannuation trust are finalised.
legalsuper members can now buy and sell S&P/ASX300 securities and shares, exchange traded funds (ETFs) and term deposits. Members can also invest up to 95 per cent of their account balance.
"Well the real driver is really that, particularly in the legal profession, members tend to have higher balances. They often work with a planner and SMSFs are quite a predominant approach to the legal profession," Mr Proebstl said.
"Given that there is significant interest in SMSFs, we really thought we needed to embed as many DIY-type characteristics that we can within legalsuper itself," he said.
Mr Proebstl said legalsuper needs to continue to deliver products and services to maintain its growth "in an increasingly competitive environment".
"We think there are a group of people who, as long as you give them increased flexibility and diversity of options, you may be able to provide them with something they will see as an alternative to SMSFs," he said.
Mr Proebstl said the direct investment option is also a response to the needs of the occupation group legalsuper serves.
"Our members have a fair level of interest in how their super is invested, and so we're really looking to provide wide, diverse cost-effective options that give them the breadth of choice that they're looking for," he said.
"When we speak to members, whether prospective or actual, we get positive reactions to the fact that we offer the platform."
Mr Proebstl predicts that Australians will become "sharper" about the way they structure their arrangements.
"They'll look to where they think they get the best yield and it won't be one approach, be it industry fund or SMSF. I think people will take a combination of approaches," he said.