Leading superannuation funds are preparing to strike back against the appeal of self-managed super funds (SMSFs) by offering inhouse self-managed options to members.

In a panel session which revealed how SMSFs now represent 32 per cent of all superannuation funds, larger than any other sector, HOSTPLUS said it would be offering members a self-managed investment platform called Choice Plus from early May.

The platform offers a choice of investments in Australian equities, exchange traded funds and term deposits, but would not offer access to property or collectables.

Paul Watson, executive manager of member and consumer choice at HOSTPLUS, said the majority of people who wanted to start an SMSF were looking for greater control around the asset classes on offer in the Choice Plus platform.

The platform would be offered to members with savings of over $100,000, though Watson said it would be principally designed for those with funds of over $250,000.

He added HOSTPLUS would be unveiling more products in this sector in the near future. “We are quite excited about these products and there will be more announcements going forward,” he promised.

These choices might include estate planning, which he identified as one of the major reasons for members leaving to set up their own SMSF.

Paul Schroder, general manager of growth and new opportunities, AustralianSuper, was in a similar fighting mood about the challenge of retaining members within super, by giving them greater choice. He measured the size of the problem by pointing out that the Australian Financial Review had four full-page adverts in its Saturday edition encouraging individuals to leave super and go self-managed.

“It is generally true that a lot of people want to transact, it is generally true that a lot of people want to self-manage. So, if people really want control over this sector, we could sell to them [the SMSF sector], we could buy one of them. We could build towards the sector, which is our current strategy. Or you could provide a platform, we could easily do that.”

He revealed how AustralianSuper had built and launched a self-managed option with FNZ that has $1.3 billion under management with 50 per cent in equities, 25 per cent cash and 25 per cent deposits.

Gerard Noonan, trustee director and chair of Media Super, made the additional points that more should be done to persuade members who had left super funds to come back. He identified those in SMSFs who were finding the process harder than they had expected and those members who were in retirement and were losing the mental capacity to keep up with the paperwork and the decision-making.

He added that more should be done to emphasise the cheapness of insurance offered within super compared to that bought in the retail market.

Schroder said this was a key issue for the cohort of people who were choosing to the SMSF route as many of them were reaching an age when their insurance premiums would be rising.

“Insurance is underused in marketing and underused as a reason for staying in a fund especially as the price of insurance is set to move upwards.”

Day 2 newsletter from CMSF 2013
Day 1 newsletter from CMSF 2013

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