Applying psychological “types” to professional cohorts is nothing new, and has even been used in the SMSF arena to classify trustees. About five years ago, independent research group CoreData identified three key types of SMSF trustee — “controllers”, “coach-seekers”, and “outsourcers”.
The controllers were initially considered the biggest representative group, and typically represented the traditional “DIY super” pioneer — keen to manage their own retirement savings, and confident they can do it themselves with their own resources and support.
Coach-seekers, on the other hand, are trustees who, while still wanting control over their retirement saving plans, know the value of informed guidance, and that the right information can put their fund ahead of the pack.
These trustees, according to the research, “seek external affirmation for their decisions, and while they would rather do things themselves, they need information and support in their decision-making and are often looking for someone to help or mentor them”.
The final category are the outsourcers, who mostly prefer to delegate management of their retirement savings to someone else.
CoreData’s initial estimates, based on its surveys, showed the breakdown of trustee types as controllers 40%, coach-seekers 25%, and outsourcers 11.9%. The breakdown today shows close to half (45.9%) of trustees are classified as coach-seekers, with the outsourcers also growing to 15%.
The research group’s latest white paper on the SMSF sector concludes that SMSF trustees are increasingly looking for support and guidance in managing their fund, and that this represents the biggest growth opportunity for practitioners and advisers.
“These behavioural profiles are more amenable to financial advice and view SMSFs not so much as a DIY option but rather a ‘help me do it’ solution to superannuation savings,” CoreData says.
The latest data also shows that trustees are getting richer. Average assets per SMSF exceed $1 million, and show a growth of 23% over five years according to CoreData research. “As trustee balances grow, so too does their need for professional advice around the benefits of diversification for wealth creation and preservation.”
Another potential new opportunity for advisers is the growth in young people setting up an SMSF. In line with the ATO’s statistics showing the increase in younger SMSF members, CoreData research found that in the last two years, close to two thirds (65.7%) of advisers have experienced growing demand for SMSF advice from 31-to-40 year olds, while more than one in five (21.7%) have witnessed an increase in demand from 20-to-30 year olds.
However, despite the fact that younger trustees are the most likely to find most SMSF-related tasks challenging, particularly keeping up with compliance, the report found the majority of trustees aged 40 and under do not currently receive financial advice. “If advisers are to tap into this younger cohort of trustees, they will need to appeal to the preferences of this age group – who tend to be digitally-savvy and information hungry.”
To download the full CoreData white paper “SMSFs – The next wave”, click here.
#[deomographics], [retirement], [Smsf], [smsfs], [super research]
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