Alternative SMSF strategies
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Christine St Anne is Morningstar's online editor.
Latest figures from the Australian Taxation Office have revealed that around 26,000 self-managed superannuation funds (SMSFs) have been set up since 2008.
It is a sector that continues to grow and its assets stand at $440 billion.
The growing number of people setting up SMSFs was a key theme at the recent Association of Superannuation Funds of Australia (ASFA) annual conference.
As ASFA represents retail and industry superannuation funds, it was logical that one of the sessions looked at the topic of whether or not retail and industry funds can provide a viable alternative to SMSFs.
Research from Tria Investment Partners found one of the key reasons people left a collective fund for an SMSF was control. However, the research also found nearly half of the people would have most likely stayed with their fund, if their fund had offered a viable alternative to an SMSF solution.
While retail and industry superannuation funds have not offered a standalone SMSF fund solution, they are offering a number of SMSF-type benefits.
Examples of two such types of products are offered by industry fund AustralianSuper and BT Financial Group, the wealth management arm of Westpac (WBC).
The $46-billion AustralianSuper fund has launched a member direct investment option for members who have over $10,000 in their superannuation account. The option allows its members to invest in companies listed on the S&P/ASX 300 Index as well as in exchange-traded funds and term deposits.
The member direct service allows people to access live stock quotes and investment tools such as watchlists and investment education.
"The service meets the needs of people looking to directly invest in shares and cash. It provides all the flexibility and convenience of a fund without the compliance cost of running your own fund," AustralianSuper general manager of product Noel Lacey says.
The cost of being in the member direct service is $15 a month ($180 for the year). There are no fees on term deposits. Brokerage fees attract a $15 minimum trade - the higher the value of the trade the lower the brokerage fees.
While members in this option have the flexibility to choose their stocks, members of AustralianSuper cannot have more than 80 per cent of their portfolio in Australian equites. There is also a 20 per cent limit in any one share.
Lacey says this is to ensure members have a diversified investment portfolio.