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Major new report released on SMSF trustees

Katarina Taurian
18 February 2014 — 1 minute read

Vanguard and Rice Warner have released a new report on SMSF trustees, revealing key property investment data and expenditure patterns.

The February 2014 Survey of Financial Needs and Concerns, released yesterday, looks at the financial needs and attitudes of SMSF trustees in pension mode. The report is based on a survey of 320 retired SMSF trustees conducted in October 2013.

One of the report’s key findings was that retired SMSF trustees have a “much lower” allocation to residential and commercial properties on average than ATO statistics show.


The level of gearing for property is also significantly lower, with 0.7 per cent of asset value being invested in geared property, according to the report.

Allocation to cash and term deposits was reported at 21 per cent, 12 per cent lower than it was in 2012, the report found.

“This is probably due to cash balances having been high in 2012 as investors waited for share markets to stabilise and to show signs of recovery. This stability and recovery has now occurred and significant sums have moved back into the share market,” the reported stated.

However, 94 per cent of respondents indicated their most significant concern was investment and associated risks. When asked about their level of concern, 70 per stated that they are “very” or “somewhat” concerned about a share market or economic decline.

The report also stated an area of “concern” is that only 54 per cent of trustees have a written financial plan, with 69 per cent of these containing plans for the draw-down strategy to fund income in retirement.

“Preparing a sound asset allocation plan and sticking to it over the long term can greatly assist investors to stay on track given the very human tendency to react to market noise,” said Robin Bowerman, Vanguard Principal and head of market strategy and communications.

Respondents also reported changing expenditure patterns in retirement compared to pre-retirement spending, with increases listed for medical, transport and leisure expenses.

Major new report released on SMSF trustees
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