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Longevity risk a thorn in SMSF
Solving the longevity risk as a healthier population of retirees risk exhausting their retirement savings is the biggest concern in the new self-managed super fund (SMSF) era.
Such is the opinion of Australian Superannuation and Compliance founding principal and director Ravi Subramaniam, who said SMSF holders will need advice on how to maximise their investments to meet their long term lifestyle goals.
"The new SMSF era will need to deal with the impact of the baby boomer investors ceasing their contributions to enter retirement and as a consequence this — added to the impact of benefit payments and drawdowns from funds — will combine to surpass those contributions for the first time," Subramaniam said.
Subramaniam also lamented over the increasing costs of administering an SMSF by service providers, adding that more regulation is adding to it.
"The administrative process associated with compliance has become the most challenging area and it is not being helped by the burden being placed onto the administrator service providers to absorb," he said.
Subramaniam also expects to see the number of generalist SMSF advisers to fall as clients start demanding specialist practitioners with SMSF specialist adviser qualifications from the SMSF Association.
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