... self-managed superannuation funds. This is with good reason.

Do-it-yourself, of course, generally refers to doing tasks yourself without the assistance of a professional. Typically, these tasks are carried out around the home with varying degrees of success.
The ATO's deputy commissioner for superannuation, Stuart Forsyth, in a speech this month makes the point: "...SMSFs are far from 'do-it-yourself or 'set and forget'. To be run successfully, they require significant time, attention and expertise."

In fact, the vast majority of SMSF trustees receive some professional guidance ranging from administration services up to full financial planning.

Surveys for the April 2014 Self Managed Super Fund report - recently published by Vanguard and specialist researcher Investment Trends - found that:

• Ninety per cent of SMSFs established in the past couple of years had used a professional or a specialist administration firm to setup their funds. For instance, 31 percent used an accountant followed by an SMSF administrator, 24 per cent; and a financial planner, 20 per cent. (Obviously, many professionals use SMSF administrators for their clients' self-managed funds.)
• Accountants were administering an estimated 265,000 SMSFs in 2014 compared to specialist SMSF administration firms administering 150,000 funds and financial planners administrating 20,000 SMSFs in-house. (Almost 535,000 SMSFs were in existence at the end of June, according to APRA's latest quarterly superannuation report, released over the past week.)
• Forty one per of SMSFs used a financial planner over the 12 months to April with 81 per cent receiving advice from various types of adviser.
• 286,000 SMSFs have unmet advice needs and are willing to pay for that advice.

The findings of the Vanguard/Investment Trends SMSF report provide more compelling evidence why running a self-managed fund is not a do-it-yourself task for their trustees. And these findings may prompt more trustees to think about to best use professional advice.

Smart Investing last discussed SMSFs and advice on August 14 in The relationship between SMSFs and their advisers.

By Robin Bowerman
Smart Investing
Principal & Head of Retail, Vanguard Investments Australia
21st August 2014