How to get double digit returns in super today!
Aussies who manage their own superannuation are much more satisfied with the performance of their funds. Here's why.
If you have a self-managed super fund (SMSF) it seems you're quite satisfied with the financial performance of your retirement savings. Findings by Australian research company Roy Morgan says overall satisfaction with super in the six months to May 2014 was 55.1 per cent, up 7.2 percentage points since this time last year.
One of the reasons Aussies could be satisfied with their super balances could be down to the double digit returns recorded to June 30. A great result for millions of Aussies, with the median super balanced option looking set to close the 2013/14 financial year with a 12.6 per cent gain. It's the fifth year in a row that the median balanced option has delivered a positive return and comes off the back of last yearís 14.7 per cent return, according to super research company SuperRatings.
Related link: Is a self-managed super fund right for you?
Member satisfaction for SMSFs is 75.6 per cent. It's the clear leader with Industry Funds following in second with 55.8 per cent. The research comes from Roy Morgan's Superannuation Satisfaction report, which is based on over 30,000 interviews with people every year. Norman Morris, industry communications director at Roy Morgan Research, says satisfaction with financial performance is a factor fund managers should be taking more notice of, especially as SMSFs continues to grow in popularity. The Australian Taxation Office says the number of SMSF members has grown to over one million, with more people looking to take control of their own retirement savings.
It appears that satisfaction with superannuation has a lot to do with the amount in super and the consequential level of engagement, he says. The ease of switching super funds and the increase in people using SMSFs mean that the retail sector will increasingly rely on their adviser network and advice to retain customers. The retail sector includes super funds provided by the major banks.
Andrea Slattery, chief executive of the SMSF Professionals Association of Australia (SPAA), says SMSF members experience increased satisfaction when their funds perform well because they have been directly involved in the investments and strategies of their fund. The increased control and flexibility of SMSFs allow trustees to tailor their fundís investments and costs to suit their own circumstances, another factor we believe results in the high satisfaction levels of SMSF members with their funds, she explains.
We also believe that SMSF members have higher satisfaction where they seek professional advice in meeting their obligations and forming their investment strategies, as this helps them achieve their retirement savings goals by utilising the expertise of specialised SMSF advisors, such as SPAA specialist advisors and auditors.
If you're thinking about setting up a SMSF, there's a few things you need to consider first. Remember managing your own super is a big responsibility and there are strict rules that govern how you can use a SMSF. Having said that, a lot of people are choosing to go down the SMSF road because it offers greater control and flexibility over what is essentially a major part of funding your retirement.
If you're unsure whether itís the best option for you, seek professional financial advice as a planner will be able to look over your situation and recommend the best course of action.