The pending inclusion of SMSFs into the ATO’s new SuperStream rollover system will be a growth enabler for the SMSF sector over the next decade, Mr Burgess told SMSF Adviser.
Superstream will “drastically” reduce the time and effort required to rollover funds to an SMSF, he said, which will make it easier for investors to transfer funds within the superannuation system.
“Once SMSFs are brought into this regime, then the transfer will happen a lot quicker. So it’ll make it a lot easier for people to not just roll money into SMSFs [and] it will just make it easier, quicker and more efficient to set up a SMSF,” Mr Burgess said.
“One of the problems at the moment with SMSFs is that you typically have to roll money from an APRA fund to get it started, and that can take quite a long time, and to some people that’s a barrier to actually setting up a SMSF,” he added.
Mr Burgess also linked technology with the surge in the number of younger investors establishing SMSFs.
However, Mr Burgess emphasised that enabling investors to make their own investment decisions doesn’t remove the need for financial advice.
“It’s just that the type of financial advice will change. So the focus will be more on how to structure [an] SMSF to make sure [investors] are getting the best benefits from the fund,” he said.
“We know that a lot of these trustees will be making their own decisions so they’re not necessarily wanting investment advice, but they’ll still be looking for what we call strategic advice, which is more around how they can structure their SMSF appropriately and so forth.”
Mr Burgess also said AMP SMSF believes growth over the next decade in the SMSF sector is going to be “just as strong if not stronger” due to changing age demographics.
“Changing age demographics [are] going to see more people moving into retirement and we know that as people get older and as their balances grow, their aspirations become to become controllers become stronger as well,” he said.
“So we suspect a significant number of those people will transition to a SMSF over the next decade.”