Too soon to establish direct investment success: Deloitte

It is too early to assess the success of industry funds' direct investment options in stemming the flow of members to self-managed super funds (SMSFs), according to Deloitte superannuation lead partner Russell Mason, but the sector shows no signs of slowing down.

Mason said continuing SMSF growth was a challenge for retail and industry funds.

"We've seen a number of industry and retail funds begin to offer direct Australian equity and term deposit options in order to counter the trend to SMSFs, and there are more sophisticated offerings on the way," Mason said.

"But it is yet too early to determine the success of these strategies."

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According to Deloitte analysis, the SMSF sector would exceed $500 billion by the end of the financial year, due to a strong equity market and continued interest from new members.

Mason said despite restrictions on concessional contributions caps, the SMSF sector showed no signs of slowing down. He pointed to previous Deloitte research that showed the attractiveness of SMSFs increased as superannuation balances were built up and members approached retirement.

"Deloitte estimates that the strong increase in the number of Australians with SMSFs now exceeds 500,000 accounts with almost 950,000 members," he said.

"Based on current growth patterns we believe membership in this sector is likely to reach one million by the end of the calendar year."

Deloitte SMSF specialist Robert Jackson said the trend was to establish an SMSF in the June quarter.

"Individuals clearly assess their tax position at the end of the financial year and they are definitely motivated to seek tax or financial planning advice to consider more effective savings strategies, which more often than not includes maximising their superannuation position," he said.