HLB Mann Judd head of wealth management Michael Hutton said many people are shying away from SMSFs due to the associated complex terminology when they could, in fact, be better off financially by starting a fund.
“[The name] might put a lot of people off. I know there has been this theory that people have been set up in SMSFs when it’s not appropriate for them, but I think by the same token there are a lot of people that could benefit from a self-managed fund that are scared away from setting up that structure,” Mr Hutton said.
“[The term] self-managed implies that people have to do it all themselves... more and more we’re finding clients say that they’re keen to have that flexibility, control and engagement but not actually self-manage it.”
Mr Hutton said that HLB Mann Judd refers to SMSFs as a “personal superfund” as it is more in keeping with what it actually involves.
“A lot of people engage advisers to do a lot of the groundwork for them and that’s why we call it a personal superfund,” he said. “You get all the personal benefits of an SMSF but you don’t have to do it all yourself.”
Mr Hutton said the industry has, more generally, become entrenched in jargon, which can complicate advice for consumers.
When advisers are speaking with a client, they should make a conscious effort to make a matter simpler as a way to increase their engagement.
“I just think jargon makes advice sound complicated, so people won’t necessarily understand what it is that an advice professional is saying,” Mr Hutton said.
“I’m a big believer in that the simpler you can keep the message the easier it is to explain and the easier it is for people to make a decision.
“I think: keep it on message, keep it relevant to the client and say it in a manner that’s clear and understandable.”