Industry funds threatened by SMSFs

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NGS Super and Mercer have become the latest industry funds to jump on the growing self-managed superfund bandwagon, announcing the planned release of their own ‘direct investment’ fund.

NGS Super says the new product will “give members more choice, while reducing development costs”. This offering will act as a customised platform for members to trade ASX300 shares from their super or pension accounts.

But the product, like many similar options  that have been launched by industry funds, is unlikely to attract the true SMSF trustee, ie the one that establishes the DIY fund for total control.

According to Mercer, the product was designed in response to member demand for more control over their investments.

Industry and retail funds have become concerned by member leakage to SMSFs.

“[The product] has allowed a number of our clients to keep their foot on the innovation pedal, while managing both their costs and their time,” Leader of Mercer’s Financial Services Business in the Pacific Ben Walsh said.

NGS Super CEO, Anthony Rodwell-Ball believes the product will make both NGS and Mercer more competitive in the superfund market.

“NGS Super has undertaken detailed research into why super fund members move to self-managed funds, so we know that more investment choice and a greater say over where their money goes is crucial to retaining these more active members.”

SMSFs are the fastest growing sector of the superfund industry, with more than 31,500 new DIY funds established in the 12 months to September 2013.