Whilst we believe that Self Managed Super is the ultimate savings vehicle for retirement, the reality is that not everyone has the account balance or means to justify starting a DIY fund.
Over 1,000,000 Australians have seized back control of their super and escaped from traditional union based or bank owned super funds. The additional control, and ability to manage your own investment strategy is appealing with 1 in 10 people stating that they intend to start an SMSF in the near future.
In 2009 the Australian government released its report into the super industry. Cooper's A Statistical Summary of Self-Managed Superannuation Funds covers a lot of ground, including growth in the SMSF sector, member demographics, member income, fund balances, investment performance, asset allocation, operating expenses and compliance.
It found that the assets in funds that were self managed, or self directed grew at an average rate of 20% during the five years to June 2009, while the rest of the industry grew at just 8%.
It also found that it was the wealthier demographic that had access to SMSF. Cooper says "The average SMSF member had a taxable income of $92,000, while the average non-SMSF member earned just half that, about $47,000."
Whilst the reality is that not everyone has a large enough balance, nor the time or expertise to take on the responsibility of managing a DIY super fund, this shouldn’t mean that the rest of us are trapped in substandard super funds.
As a result, a new generation of super funds called Self Directed Super funds (or SDSF) allows the best of both worlds. SDSF Is your personally owned super fund that gives you all the control, while someone else acts as trustee & does all the work to manage and implement your decisions, at an affordable cost for lower balances.
Just like SMSF, you can invest in ASX top 500 shares, bonds, exchange traded funds, term deposits, cash, fixed interest securities, property, and most assets that an SMSF allows, yet removes all the onerous responsibility for being a trustee of the fund.