Experiences of Current and Former Members of Self-Managed Superannuation Funds

41 Pages Posted: 18 Oct 2016 Last revised: 22 Oct 2016

See all articles by Ron Bird

Ron Bird

University of Technology Sydney (UTS)

Doug Foster

University of Surrey - School of Management

Jack Gray

University of Technology Sydney (UTS)

Adrian Raftery

Deakin Business School

Susan Thorp

The University of Sydney Business School

Danny Yeung

University of Technology Sydney (UTS); Financial Research Network (FIRN)

Date Written: September 17, 2016

Abstract

The number of self-managed superannuation funds (SMSFs) has grown at more than 5% p.a. over the past five years. The net growth rate consists of 7% new SMSFs and 2% closures. More than 570,000 SMSFs now serve over one million members but little is known about the experiences of members. We survey 854 current and 147 former members to find out how they operate their funds and how they rate the experience. Participation in a self-managed fund is associated with high levels of general interest in superannuation, continuing even after a fund is wound up. However the number of “detractors” of SMSFs exceeds the number of “promoters”, among both current and former members. SMSF members say they enjoy “control” but the majority delegate or share most investment and operational tasks with financial professionals. Many express frustration with administrative and compliance responsibilities. Few SMSF members benchmark their fund’s performance but three times as many rate the performance of their fund as above average, compared with other SMSFs, than below average. The probability of closing a SMSF is significantly higher if members use net returns to judge performance rather than other indicators such as account balance or asset allocation.

Keywords: Self-managed superannuation funds, SMSFs

Suggested Citation

Bird, Ron and Foster, Doug and Gray, Jack and Raftery, Adrian and Thorp, Susan and Yeung, Danny, Experiences of Current and Former Members of Self-Managed Superannuation Funds (September 17, 2016). CIFR Paper No. 128/2016, Available at SSRN: https://ssrn.com/abstract=2853887 or http://dx.doi.org/10.2139/ssrn.2853887

Ron Bird

University of Technology Sydney (UTS) ( email )

15 Broadway, Ultimo
Ultimo, New South Wales 5000
Australia

Doug Foster

University of Surrey - School of Management ( email )

Guildford, Surrey GU2 7XH
United Kingdom

Jack Gray

University of Technology Sydney (UTS) ( email )

15 Broadway, Ultimo
PO Box 123
Sydney, NSW 2007
Australia

Adrian Raftery

Deakin Business School ( email )

221 Burwood Highway
Burwood, Victoria 3125
Australia
+61-3-92446643 (Phone)

HOME PAGE: http://www.deakin.edu.au/profiles/adrian-raftery

Susan Thorp (Contact Author)

The University of Sydney Business School ( email )

Abercrombie Building
H70
The University Of Sydney, NSW 2006
Australia
0290366354 (Phone)

Danny Yeung

University of Technology Sydney (UTS) ( email )

15 Broadway, Ultimo
PO Box 123
Sydney, NSW 2007
Australia

Financial Research Network (FIRN) ( email )

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

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