by Patrick Garrett Technology and innovation have fundamentally changed the landscape of Australia’s booming self-managed superannuation industry, according to speakers at a special Six Park breakfast seminar on April 12 and as outlined in our whitepaper.
Key messages from the seminar include:
- We live in an increasingly complex and volatile investing market, so managing risk and investment diversification is critical for long-term wealth management
- The emergence of low-cost, professionally managed robo-advisors and SMSF administration services have lowered the bar for a viable SMSF, possibly as low as $100k
- Robo-advisors provide an easy way to get prudent investment diversification, addressing a major problem that exists in the SMSF market today: poor performance due to poor diversification
- Lower costs have a dramatic impact on your retirement balance through the power of compounding interest: a dollar saved today is worth a lot more than a dollar in 20 years.
Former Australian Minister of Finance and Six Park Investment Advisory Committee member Lindsay Tanner told the seminar that diversification was pivotal to reducing investment risk during a time of “unusual political incoherence and turbulence”. He characterised the world political landscape as unusually unstable.
He said investing was not as simple as it had been when he was young. “There is a great deal of choice – but that inevitably creates the risk of making bad choices.”
Mr Tanner explained his role as a member of Six Park’s Investment Advisory Board and the importance of the human overlay to the company’s robo-advice platform.
“Self-managed super funds are typically not diverse, which can mean there is high risk involved. Going global and diversifying can be expensive, but not with Six Park. There are humans behind he robots – what we do is keep an eye on the underneath and make judgments on the ETFs (exchange-traded funds) used.”
Six Park’s Director of Sales Andrew Greig outlined how technology, automation and innovation have disrupted the $650 billion SMSF sector over the past five years, with quality services emerging in both SMSF and investment management. He discussed how there are misplaced blanket assumptions reported in the market about how much money is required to establish a viable SMSF.
However, many of these assertions are based on out-dated cost assumptions and don’t recognise new ways that investors can build diversified investment portfolios. It’s now feasible in certain situations to viably manage a $100k SMSF.
The audience also heard from iShares Australia Head of Wealth Alex Zaika, who discussed the rise of ETFs in superannuation and the broader investment landscape. ETFs are the prudent investments utilised by robo-advisors like Six Park to give clients low-cost diversification. iShares/Blackrock is the largest fund manager in the world, so we were pleased to have Alex join our panel.
Six Park is a proud sponsor of the SMSF Association’s Trustee Knowledge Centre, and Mark Rogerson from the SMSF Association gave an overview of the obligations, benefits and risks associated with managing your own super.
Six Park also launched its SMSF white paper at the seminar at Mantra on Russell. The white paper is a comprehensive examination of the new paradigm for self-managed super, investigating the impact of lower costs, the role of technology, and the importance of investment diversification.
Note: As noted in the white paper and at the seminar, Six Park is not authorised to give personal advice with regard to whether SMSFs are suitable for your situation, so you need to do you homework or seek professional advice when assessing whether an SMSF is right for you.