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Industry funds could establish in-house SMSFs
Industry funds can stem the exodus of members into self-managed super funds (SMSF) by providing a mechanism for those members to set up and run their own SMSFs under the guidance and administration of the industry fund, according to industry commentators Deloitte.
Speaking at a superannuation breakfast in Melbourne, Deloitte Private director Robert Jackson said a SMSF could be used by an industry fund member to hold special-purpose assets or assets that wouldn't be found on a platform.
Jackson used the example of a fixed income product, or shares that sit outside the ASX300, as an example of what funds could allow members to place in a SMSF.
Industry funds have the administration and execution capabilities to run a member's SMSF together with their industry fund account, and can even provide consolidated reporting at the end of the financial year, Jackson said.
Members will swallow the cost of setting up an SMSF under the industry fund if they believe they will gain financial benefit by holding special assets, he said.
However, Jackson said regulatory or administrative changes might need to be made for industry funds to establish SMSFs.
Anecdotal evidence suggested that 93 per cent of members who get advice end up leaving an industry fund, but they only reached out for that advice when triggered by a non-super event, he said.
Industry funds have to cater for those events with more general financial planning, he said.
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