SMSFs are thriving – and it’s time critics acknowledged it

It is time for critics of SMSFs to finally acknowledge the sector is working well and giving Australians the opportunity to enjoy security and dignity in retirement, says Olivia Long, CEO of the SMSF administrators Xpress Super and SuperGuardian.

“Both the recent the Financial System Inquiry, which followed the Cooper Review four years earlier, have given the sector a clean bill of health.

“But it seems no matter how positive these in-depth reviews are about the SMSF sector, there is no shortage of people lining up to provide adverse comment. Yet our critics blithely ignore these reports’ conclusions and continue to take misinformed pot shots at our sector.”

Long was commenting on a recent offering from the consulting firm Tria Investment Partners, which argued that the leakage from APRA-regulated funds to SMSFs appears to be slowing and was no longer a “burning” issue requiring a “drastic response”.

“The fact remains that for the five years to 30 June 2013, $75.6 billion was rolled into SMSFs from APRA-regulated funds and only $19.9 billion was rolled out of SMSFs.

“Put another way, for about every $4 rolling into an SMSF from an APRA-regulated fund, only $1 was rolling out,” she said.

“On my reading of Tria’s interpretation, it argues ‘the SMSF situation actually got better for the first time since 2006’.

“I am not statistician but Tria’s interpretation is based on 2013 ATO figures and I think we need more than one year before start talking about trends.”

Long also notes that the Investment Trends/Morningstar research released today shows that SMSF trustees often set investment trends that the broader investing market then follows.

“It’s what I have always argued about SMSF trustees – they are more sophisticated investors than the market gives them credit, especially the so-called professional investors,” she says. “The evidence clearly shows that SMSF returns often outperform the APRA-regulated funds.”