Survey sheds new insights on why individuals set up SMSFs

25 November 2020

SMSF Association Media Release

An SMSF Association survey of nearly 800 SMSF trustees finds individuals are motivated by far more than costs or investment returns when deciding to establish a self-managed super fund.

SMSF Association CEO John Maroney says: “The long-standing debate when comparing an APRA-regulated fund with an SMSF is typically restricted to a simple analysis of costs and returns,

“But the reality, as the SMSF Association’s new ‘Is an SMSF the right answer for you?’ Flyer highlights is not that simple, with an individual’s desire for control over their own personal retirement income goals also playing an important role in the decision-making process.

“With the Rice Warner research released on Monday showing how SMSFs are competitive with APRA-regulated funds based on costs and investment returns, it’s important to focus on the qualitative factors that are often even more important when it comes to setting up an SMSF.

“As the Flyer shows, the key reasons why trustees chose an SMSF are control, flexible investment choices, dissatisfaction with their existing fund, and tax and estate planning. In a nutshell, it’s individuals wanting to take control of their financial future.

“The Association has always believed this to be case. Individuals who opt for an SMSF are those for whom being able to directly influence their retirement income strategy is very important. In many instances they are small business owners who not only like having that control but believe they can execute it responsibly, especially, in many instances, when they have an SMSF specialist advising them.”

Aside from what motivates individuals, the survey also highlights some key takeaways that provide fresh insights into the member experience in an SMSF:

  • 8 out of 10 trustees believe their SMSF is good value for money;
  • 9 out of 10 trustees believe managing and engaging with their own SMSF provides them with a level of satisfaction;
  • Around half of all SMSF trustees own or have owned a small business;
  • The majority of SMSF trustees spend between 1 to 5 hours a month administering their SMSF;
  • Over half of the SMSF members surveyed have had their SMSF for over 10 years.

As part of this survey, the Association interviewed a couple, John and Kerry, about their SMSF journey. Their experience can be found here.

Is an SMSF the right Answer for you?

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