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  • » Time to protect people from their self-managed (SMSF) financial demise

#1 2016-06-12 02:51:35

willrocks
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Time to protect people from their self-managed (SMSF) financial demise

The nanny state is growing.

Time to protect people from their self-managed financial demise
As a society, some things are deemed too risky to be available open slather, like owning a firearm, super-fast cars, certain drugs. Laws governing their use have been imposed for the greater good.

But when it comes to self-managed super funds (SMSF), which now represent almost one-third of our super system, the time has come to consider whether people need to be protected, not just from themselves, but to protect the system.

...

http://www.brisbanetimes.com.au/busines … pfur3.html


"You can ignore reality, but you cannot ignore the consequences of ignoring reality." - Ayn Rand

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#2 2016-06-12 03:09:48

mmm....shiney!
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Re: Time to protect people from their self-managed (SMSF) financial demise

I'd put journos on a par with catfish, except catfish taste better.


The woolgrower's target shall be the good thriving of his flock and its pastures, and so of himself and those whose livelihoods depend on his enterprise.
"The Woolgrower's Companion", 1906.

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#3 2016-06-12 03:20:58

Big A.D.
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Re: Time to protect people from their self-managed (SMSF) financial demise

The latest figures from the ATO show that almost half of all self-managed super funds on average lost or didn't make any money over the past seven years to June 2014, compared with industry and retail funds, which grew an average of 2.9 per cent.


I am the Leafy Sea Dragon.

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#4 2016-06-12 03:35:35

JulieW
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From: Australia
Registered: 2010-10-14
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Re: Time to protect people from their self-managed (SMSF) financial demise

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#5 2016-06-12 03:57:34

aleks
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From: Karl-Marx-Allee
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Re: Time to protect people from their self-managed (SMSF) financial demise

http://www.superguide.com.au/smsfs/smsf … uper-funds

SMSFs outperform large funds over 8 years, just

SMSFs outperform large funds over 8 years, just
Trish Power - January 20, 2016 5 Comments
Note: The ATO publishes an annual report about SMSFs for each financial year. This article covers the latest SMSF performance data available from the ATO, as at January 2016. The ATO will provide updated performance data (for year ending 30 June 2015) in late 2016.

A common argument put forward against individuals starting a self-managed super fund is that budding SMSF trustees could lose their hard-earned super savings through inexperienced investing, and bad investment decisions. Until relatively recently, there wasn't much evidence confirming or denying this 'world view' mainly proffered by the large super fund sector.

The ATO now publishes SMSF performance data and the real story is quite startling. SMSFs had outperformed the large fund sector (corporate, industry and retail funds in three years out of eight, and performed equally in another year. Over the 8-year period to 30 June 2014 however, SMSFs outperformed the large fund sector, just!

SMSFs outperform over the long term, on average
When you look at the average annual return over the 8-year period that the ATO statistics cover, the recent outperformance by the large fund sector does not prevail over the longer term. Based on the figures in the table below (see later in article), the average annual return over the 8-year period to 30 June 2014, is:

4.99% a year, for SMSFs
4.8% a year, for large super funds.
In anyone's language the long-term averages listed in the bullets above are not impressive for either category of super fund, but note that the Global Financial Crisis occurred during this period.

We will be able to get a better sense of long-term investment performance when the ATO releases the 2015 financial year performance data.

Important: The average return figures for 8 years listed above are calculated by SuperGuide, and are not official ATO figures (since the ATO does not produce these calculations). The calculations however are based on official data appearing in the table below, sourced from several ATO reports. Some yearly returns have been adjusted by the ATO over time, and these adjustments are incorporated into the table below. Several investment websites have been publishing previous versions of the SuperGuide calculations, and relying on our analysis, without attributing our site as the source or seeking SuperGuide's permission. Instead, they are quoting the 8-year averages (or 7-year average annual returns from previous editions) as ATO official figures.

Large funds outperform SMSFs on a year-by-year basis
Now that updated performance figures for the 2014 financial year are available (delivering 11.7% for large funds, compared with 9.8% for SMSFs for 2014 year), the large fund sector wins the outperformance year-by-year debate. With the adjustment to the performance figures for the 2014 financial year, the large fund sector can now claim to outperform SMSFs 4 years out of eight.

SMSFs outperformed large super funds for the three years ended 30 June 2007, 30 June 2008, 30 June 2009, but large super funds performed better for the years ended 30 June 2010, 30 June 2011, 30 June 2013 and 30 June 2014. For the year to 30 June 2012, both SMSFs and the large fund sector each delivered 0.4%, according to the ATO.


Only you have your best financial interest at heart, be your own guru

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#6 2016-06-12 04:13:40

aleks
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Re: Time to protect people from their self-managed (SMSF) financial demise

Australian Super is the largest super fund in the country. Their default investment choice: Balanced, currently has 11% of the portfolio invested in infrastructure projects which tend to be highly illiquid which means their reported valuations can be debated to say the least.

Overvalued infrastructure and, 2.9% average growth

which means....
WHICH MEANS...


Only you have your best financial interest at heart, be your own guru

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#7 2016-06-12 04:59:56

Roswell Crash Survivor
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Re: Time to protect people from their self-managed (SMSF) financial demise

mmm....shiney! wrote:

I'd put journos on a par with catfish, except catfish taste better.

Having tasted genuine Southern Fried Catfish in Nashville, can confirm its good eatin'.


The Roswell Crash Survivor

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#8 2016-06-12 06:03:24

projack
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Re: Time to protect people from their self-managed (SMSF) financial demise

Big A.D. wrote:

The latest figures from the ATO show that almost half of all self-managed super funds on average lost or didn't make any money over the past seven years to June 2014, compared with industry and retail funds, which grew an average of 2.9 per cent.

So you are comparing the worst 45% of SMSF to the 100% of industries and retail funds average of 2.9%.
Do you also have figures the other way around?


The US dollars and Treasury debt called "risk off" because the global fiat system can only survive as long as that remains the case.

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#9 2016-06-12 06:12:43

aleks
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Re: Time to protect people from their self-managed (SMSF) financial demise

Yes, it doesn't take Phd in mathematics to see what she did there


Only you have your best financial interest at heart, be your own guru

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#10 2016-06-12 08:17:11

boyracer
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Re: Time to protect people from their self-managed (SMSF) financial demise

projack wrote:
Big A.D. wrote:

The latest figures from the ATO show that almost half of all self-managed super funds on average lost or didn't make any money over the past seven years to June 2014, compared with industry and retail funds, which grew an average of 2.9 per cent.

So you are comparing the worst 45% of SMSF to the 100% of industries and retail funds average of 2.9%.
Do you also have figures the other way around?

aleks wrote:

Yes, it doesn't take Phd in mathematics to see what she did there

I thought the same thing at first but I think she is referring to funds under a certain size which make up 45% of all SMSF's and then comparing their returns to regulated funds which is arguable where those funds would otherwise be. There was another article I read today (essentially the same but different reported) that reported this information in a more transparent manner. The quoted comment is still deceptive in my opinion.

It's consistent with the the theme of the article that small SMFS do not and cannot get good returns. I would dispute that but one point of the article I did agree with is that there will be a lot of people scammed out of their retirement savings as the $$$ amounts of SMSF's grow and they get pushed into seeting up an SMSF to make dud investments. Too many sharks circling a big shiny pot of money.

Don't see why I should get penalised for that though. My SMSF is quite vanilla but still manages to do much better than 2.9% a year. Which is a joke of a return to be honest!

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#11 2016-06-12 13:33:55

projack
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Re: Time to protect people from their self-managed (SMSF) financial demise

"SMSFs with $50,000 or less in assets had an average operating expense ratio of a staggering 12.1 per cent. SMSFs with more than $500,000 in assets had an average operating expense ratio of less than 1.4 per cent."
The above statement indicating to me that SMSF operating expense is around $6000. The argument should be how to reduce smaller value SMSF annual cost since even with 12% return they are under water, even if they are beating the industry average multiply times.

Last edited by projack (2016-06-12 13:38:13)


The US dollars and Treasury debt called "risk off" because the global fiat system can only survive as long as that remains the case.

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#12 2016-06-12 21:52:46

errol43
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Re: Time to protect people from their self-managed (SMSF) financial demise

Big A.D. wrote:

The latest figures from the ATO show that almost half of all self-managed super funds on average lost or didn't make any money over the past seven years to June 2014, compared with industry and retail funds, which grew an average of 2.9 per cent.

What!!! No Silver!

Regards Errol 43

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