The superannuation industry needs to quickly adapt to the change brought on by the needs of self-managed superannuation fund (SMSF) investors, according to an industry roundtable.
Bravura Solutions’ roundtable, “Driving change through innovation in SMSF offerings”, identified that technological innovation and generational change were driving growth in SMSFs, as more Australians sought an emotional connection with their investments.
The industry must therefore embrace challenges, such as the rapidly growing segment of investors with larger account balances who want a greater level of involvement with their superannuation.
“It doesn’t appear that SMSF investors are particularly sensitive to price, but choice and control over their investments are key drivers and, with that, visibility,” Bravura head of portfolio solutions for Garradin Darren Speirs told InvestorDaily.
“[In addition], an interesting comment made in the roundtable was that trustees and members have to wait until their tax return is finally completed before they understand the financial situation of their fund, yet we have all the technological capability to provide it on a daily basis.
“So why are we not doing that?”
Such technological improvements were expected to be available to the market within a 12 to 24-month time frame, Speirs said.
“Generally, the SMSF market is really fragmented at the moment [in terms of engagement],” he said.
“Clearly, there’s going to be significant consolidation going on in the course of the next two years.”
The superannuation industry has acknowledged the unique needs of SMSF investors, as a number of players look to offer services similar to SMSFs in order to slow down the loss of their members.
“I think we are seeing technological innovation and we’ll see a lot more as consolidation occurs, but I’m just wondering what that system will look like,” Speirs said, adding that it could be a similar structure to what super funds and platforms were currently running on.
“There are some radical thoughts on this market and the landscape 10 years from now.”
By Krystine Lumanta