Our 'hardest' SMSF tasks

Are they the seemingly ever-changing rules, the paperwork and administration or the challenge of choosing where to invest?

If you named dealing with the changing rules and choosing investments as your two hardest jobs, you are among hundreds of thousands of other trustees.

Comprehensive surveys for the 2017 Vanguard/Investment Trends Self Managed Super Fund Reports, released during the past week, asked SMSF trustees to list the hardest aspects of running an SMSF. Their responses include:

• Choosing investments (31 per cent).
• Dealing with regulatory uncertainty (31 per cent).
• Finding time to research investments (16 per cent).
• Handling paperwork and administration (16 per cent).
• Finding time to plan and review for their SMSFs (12 per cent).

The most positive finding was that a quarter do not find any aspect of running their fund hard.

It should be emphasised that trustees could give multiple responses to the survey conducted by specialist researcher Investment Trends. For instance, other responses dealt with such specific challenges as having too much exposure to certain asset types (9 per cent) and sticking to an investment strategy (4 per cent).

The findings that many SMSF trustees have difficulty choosing investments and in dealing with regulatory uncertainty partly explains another finding from the survey that a large proportion of SMSFs recognise that they have unmet needs for advice.

Investment Trends estimates that 277,000 SMSFs – out of 585,000 funds at the time of the survey – had unmet needs for advice. This is the highest number to date based on past annual surveys.

An estimated 152,000 SMSFs have broad unmet needs for advice on tax and super while 113,000 have unmet needs for advice on retirement strategies. And an estimated 103,000 funds have unmet needs for investment advice.

Many SMSFs recognise their unmet need for advice on inheritance and estate planning (an estimated 59,000 funds), strategies in response to recent super changes (51,000), tax planning (50,000), investment strategy/portfolio review (50,000) and identifying undervalued assets (50,000).

Other unmet advice needs include investing for a regular income (46,000 funds), Exchange Traded Funds (46,000), SMSF pension strategies (45,000), offshore investing (43,000) and longevity protection (38,000).

The finding that almost half of Australia’s SMSFs recognise that they have unmet needs for professional advice is a critical acknowledgement by trustees that they need professional guidance.

In turn, this will hopefully lead to more trustees actually going the next step of gaining that advice.

Robin Bowerman,
Head of Market Strategy and Communications at Vanguard.
22 August 2017
www.vanguard.com.au