Super round-up: SMSF age trending younger, Maritime Super in the bad books

Super round-up: SMSF age trending younger, Maritime Super in the bad books

A new report from an investment firm shows the age make-up of SMSFs is trending younger.

AUSIEX, Australian Investment Exchange Limited, found the first SMSF accounts from Generation Z (1997 birth year onward) had been opened in the past year.

Accounts for Millennials (1981-1996) have reportedly quadrupled over the past decade, and the average age of account holders lowered from 67 to 59.

AUSIEX serves approximately 10% of the Australian self-managed super market, with 51.3% of those accounts advised - 43.9% are self-directed.

The investment platform had experienced a 9.3% growth in account numbers in the July to September 2021 quarter when compared with the same quarter in 2020.

AUSIEX CEO Eric Blewitt said this could be a sign of a change in investment preferences in the wake of the pandemic.

“Our data shows that while the bulk of SMSF investors are still older Australians, the face of investing in Australia is changing – and perhaps also growing in confidence,” Mr Blewitt said.

“By and large, SMSF investors are optimistic. They are net buyers through the market cycles and are prepared to hold their nerve in the face of dramatic local and global developments, such as a rout in tech stocks and the first increases in official interest rates.

“They are willing to look outside the local market and conventional options to play bigger themes that drive investment returns.”

A recent survey from investment platform eToro also showed an increasing preference among younger generations for self-managed super.

However Australian Tax Office data from June 2021 showed just 3.3% of SMSF account holders were under 35.

Maritime Super in the bad books

Financial regulator ASIC has ordered Maritime Super pay two infringement notices totalling $26,640, which it paid on 22 April.

Maritime reportedly stated that its investment partnership with Hostplus would result in reduced fees for members.

This claim was sent in newsletters to members from March through June 2021.

However ASIC found this was misleading - 77% of Maritime members experienced increased fees, and higher fees were seen across six of Maritime's 11 investment options.

This follows the fund sending a corrective disclosure to members, at ASIC's request, in August 2021. 

ASIC deputy chair Sarah Court said the misleading communication was a concern.

"The superannuation industry is going through a period of consolidation and change. As such, it is crucial that consumers and fund members are provided accurate information so that they can make informed decisions about their super," Ms Court said.

The ‘missing middle’ in retirement income

The Government’s recent Retirement Income Covenant outlined ways super funds can maximise benefits for members.

This includes more hands-on advice, and super funds must enact a retirement income strategy and publish a summary by 1 July.

On Tuesday the Actuaries Institute released a paper highlighting how super funds can best serve the “really difficult” group of Australians on middle incomes.

“When you retire, your salary or wage stops. From that point on, you need to fund your lifestyle using your own savings plus any Age Pension income that you might become entitled to,” said paper co-author and senior actuary Jim Hennington.

“For very wealthy people, this might be easy. For those on lower incomes, it can also be straightforward – if they are managing on the income provided by the Age Pension.

“But for many people in between, which we refer to here as middle Australia, the maths to get this right is really difficult.”

The Institute’s paper outlines metrics that funds can use to determine retirement end date, safe retirement income, and risks associated with retirement income.

“Applying this over what could be a 30-year time frame in retirement is complicated and requires new thinking. Trustees will have to be more hands-on and not leave the lifespan risk issues to members,” Mr Hennington said.

“This starts to raise the question: How can superannuation funds measure retirement income when we do not know how long that income needs to last?”


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Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of May 26, 2022. View disclaimer.


Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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