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SMSF members over confident
People with a higher than warranted perception of their numeracy and financial literacy skills are more likely to choose a self-managed superannuation fund (SMSF) than other funds, according to a Centre for International Finance and Regulation (CIFR) study.
The study found members were only partly satisfying their starting objectives for their fund and had a surprisingly poor standard of knowledge of SMSF regulation.
The study said on starting an SMSF most members invested in Australian shares, increased their super contributions, and moved to a safer investment strategy — often placing funds in a term deposit.
Leader of the study, University of Sydney professor, Susan Thorp said while SMSF members rated themselves as very involved in super affairs, not all SMSF members were advocates for self-managed.
While many SMSF members enjoyed the control around 60 per cent of current SMSF members spent less than $2,000 a year and less than four hours per month operating their fund, the study found.
"The majority made less than one financial transaction per month over the past year. Members tend to share most tasks with advisors or delegate them entirely," CIFR said.
"Taking this into account, it is perhaps unsurprising that boredom or the burden of fund administration activities are the most likely causes of fund wind ups."
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