SuperEasy Articles
New Survey Finds: SMSF trustees diversifying their super portfolios

Recent survey by one of the leading Australian financial institutions has come up with some interesting new findings relating to the self-managed superannuation funds. Contrary to the popular and widely advertised beliefs, the survey reveals that one third of DIY super fund trustees are wealthy older Australians (over 55), hands on and savvy when it comes to investing. They avoid the professional advice and invest themselves successfully in a diversified investment portfolio.

Equally interesting is the statistics showing that the smallest portion of the SMSF investments is cash. This contravenes the widely accepted opinion, that the average DIY investor keeps the majority of the funds in cash, due to the lack of investing expertise. Not so according to the survey figures. While the largest and the most popular investment type remains the shares in the Australian companies, the rest of the superannuation money is almost equally spread between the managed funds and residential and commercial property. In laymen's words: DIY investors are doing it by themselves and doing it successfully.

The pattern with SuperEasy clients highlights the emerging trend of trustees being confident in investing in derivatives such as: options, futures, and contracts for difference (CFD), aside from the most favourite category, shares.
SuperEasy Administration Calculator is a show case in itself of the investment diversification seen in our clients' portfolios, and has been adapted to enable the trustees getting the fixed quote for their annual administrations, by simply populating the fields in the calculator. In the process they are assisted by the Information panel, the online tutorial of the financial terms and conditions relevant to the yearly administration.

SuperEasy Calculator remains to be unique and unmatched in the market, and is used widely and successfully by our clients, or just investors wanting to get a quick yet reliable quote, when comparing our services and prices with other service providers.

The practice of the majority of DIY super service providers still resonates the old accounting practices, where a client needs to call in, seeking an explanation about pricing and different issues relating to the tax return and audit of their superannuation funds. We are constantly told by the customers who end up being SuperEasy service users, that the fees published or advertised by the DIY superannuation industry service providers, either via search engines, or on their web sites, often vastly differ from the final bill they are confronted with.

Also, it is not uncommon, that service providers double up their fees from one financial year to the other, with or without any prior notice to the clients.

Clients, who have grown to be our core clientele and have joined us years ago, still enjoy the very same prices that attracted them to SuperEasy in the first place. We recognize the trustees' reluctance to pay more for their yearly administration, because this diminishes their achievement and effort invested in the management of their SMSF' assets during the year.

Service providers who are trying to get the segment of the market by offering substantially lower prices, keep on forgetting that the loyalty of the client goes hand in hand with the quality of the service and competitive pricing, and that a customer who was attracted by the low pricing, will not come back next year, if they are mislead about the pricing, or the quality of the service has been compromised. Hence the beauty of the Internet and the availability of the free research to everybody.

The clients often ask us, why and how does the SMSF tax return and audit differ from the personal ones? When we explain the different structure of the SMSFs and the similarity in the accounting approach to the company tax returns and audits, they are astounded at the meticulous detail the financial reporting of a SMSF outlines, and the effort that goes into it.
The clients also argue " but I have only 5 investments in the fund, because I have bought and sold 25 additional ones during the year, and they are not part of the fund any more at the end of the financial year". This comment, usually coming from the new SMSF trustees, shows their lack of understanding of the accounting procedures and the whole purpose of tax return and audit reporting, that focuses on the entire picture of the fund and all the investments (underlying transactions) that have at one point or another been part of the fund during the financial year.

With the Super Choice approaching fast, and starting to be recognized by the professional and commercial institutions as a landslide factor that will reshape the face of the superannuation industry, it is expected that new SMSF service providers will try to exploit this change in the market and hop on the gravy train. This trend, already starting to emerge now, is monitored by ASIC, who are trying to do their best in "cleaning up" the market of such operators, making sure that the legislation is adhered to, and customers are not short-changed.

To road test our updated Administration Calculator, and to get an obligation free quote, that is fixed, and includes all the financial statements, tax return, audit and lodgement with the ATO, please click here.

First Published: 30 March 2005 - Copyright © SuperEasy Pty Ltd

This article is intended to be a factual analysis of past investment returns. It is not intended, nor is it to be regarded, as investment/securities advice. It does not take into account whether any particular investment or type of investment is suitable for your individual circumstances. It is strongly recommended that you seek professional advice before making any investment choice or decision.

SuperEasy Pty Ltd is not licensed to provide advice on investments, or legalities of the types of investments that you can have. We strongly recommend that you seek professional advice from an AFSL holder before making any investment choice or decision.