Friday, October 08, 2010

Professional Help*

Not surprisingly, the percentage of self-managed super funds seeking investment advice fell in the immediate wake of the global financial crisis.

When investors are disappointed with their returns, many typically think they can do a better job by themselves – although logic would suggest that when returns are suffering, quality professional advice is even more needed.

Now with stronger investment markets, more SMSF trustees are beginning to turn back to financial planners.

The 2010 SMSF Investor Report, released this week by specialist investment researcher Investment Trends, reports that more than 65% oSMSFs gained investment advice over the past 12 months – up rather modestly at this point from 61% i2009.

This advice was from a range of specialist financial planners, accountants, full-service brokers, specialist super consultants and private bankers – all with the appropriate ASIC qualification to provide investment advice. And by far, specialist financial planners gave the largest proportion of the advice.

The particularly interesting percentages provided by Investment Trends are that back in 2007, before the GFC, 71% oSMSFs gained professional investment advice, and this percentage had fallen sharply to 61% blast year. So there is still quite a bit of ground for advisers to recover.

According to the report, just 10% oSMSFs seek investment advice because the trustees are “uncomfortable making their own investment decisions”. Many more seek advice to get a second opinion, gain access to a wider range of investments and to gain access to an adviser’s technical skills.

Clearly, a challenge for advisers in the future is to convince SMSF trustees, and other investors for that matter, that their services are needed throughout all market conditions – good and bad.

* Written by Robin Bowerman, Head of Retail at Vanguard Investments Australia.
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