“SMSFs may be appealing to younger people because they provide greater control over investments,” he says.
Ease of access to trade shares – both local and overseas – is also driving the trend.
‘When people are more engaged with their investments, and they have that level of control, it feels less risky to them.’
Bell Direct head of distribution Tim Sparks
Thanks to technology and a wealth of complex financial information and advice now available online, this new breed of investors is making decisions about sharemarkets traditionally reserved for institutional investors.
Some took more control of their super after being spooked by temporary market losses when COVID-19 first landed on our shores. Others did so for other reasons, including knowing that their retirement savings were being invested ethically in specific companies for the good of the planet.
The average age of someone running their own SMSF has dropped from 58 to 45 in just three years, according to Bell Direct head of distribution Tim Sparks.
“More so than ever, people want to take control because they simply don’t know where their super is invested when they’re with a major super fund. Or they don’t agree with where the fund is investing.
“And when people are more engaged with their investments, and they have that level of control, it feels less risky to them,” he says.
The establishment and running costs of SMSFs are also considerably lower than where they were a decade ago, which makes running your own SMSF far more viable for more people, Sparks says.
A number of share trading websites now offer relatively cheap SMSF administration services.
SMSFs are a popular vehicle to not only invest in shares, but also property and commodities such as gold, which provides portfolio diversification. During periods of market uncertainty, investors take comfort in the diversification benefits those assets provide, Sparks says.
However, taking responsibility for your retirement savings is not for everyone. It takes a good portion of time and is recommended only for those with a genuine interest in sharemarkets – and are prepared to do their own research.
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It’s also not for the faint-hearted, Sparks says. Block out the noise in the market and stay aligned to your long-term financial goals, he says.
“A diversified portfolio of Australian shares, international shares and bonds across a broad base of asset classes over the long term is the best way to build wealth,” he says.
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.