Boomers Burnt Over Super Losses Turn To Self Education In Droves

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21st October 2010, 07:00am - Views: 803







Media Statement 





For immediate release: 21 October 2010


BOOMERS BURNT OVER SUPER LOSSES TURN TO SELF EDUCATION 


With so many baby boomers scrambling to recover huge investment losses, one Australian

training organisation has seen an unprecedented spike in membership and enquiries relating to

education courses for self managed super funds (SMSF).


The Sharemarket College CEO Graeme Rogers said training membership had more than

doubled in the past 12 months.


“It appears the boomers are issuing their own warning message – educate yourself in super

fund management or be prepared to wear the losses.


“When you look at the industry figures for self managed or DIY (do it yourself) super funds, the

increase in enquiries at the college makes a lot of sense,” he said.

 

“As at June 30 2010, there were 428,000 super funds under self management. That’s one third

of the nation’s total retirement savings and the figure outstrips any other type of super fund. 

 

“People are turning in high numbers to self management of their super because they are

unhappy with the poor results of retail and industry super funds. 

 

“Baby boomers in particular have been left bewildered with huge super fund losses, leaving

some unable to retire and others short on the cashflow needed to fund their retirement lifestyle.


“Unfortunately with so much money under their control, retail and industry super funds do not

have the same flexibility as a DIY fund – hence the overall paper loss in personal super funds.

It’s an unavoidable byproduct and leaves you with a total lack of control over your own money.”


Mr Rogers said the College had also seen an increase in people already with self managed

super who were no longer willing to accept the lack of action from some financial advisers. 


“One of our members who recently joined, had lost $80,000 in the GFC downturn and been

billed $16,000 for the privilege. 


“The real disappointment is that even in the GFC downturn, super portfolios could have been

protected and losses stopped by using hedging strategies - affording a much higher return over

the long term.

 

“People now are deciding to educate themselves so they can better understand and question

the advice; or take that step to manage their own super fund.”


In response, the SMC has introduced a dedicated SMSF training program; a three day

accredited course, a SMSF Registration Kit; and bi-monthly ongoing mentoring and support. 


Misc Miscellaneous The Sharemarket College 2 image

“It’s been incredibly rewarding to see our course participants, from regional and city centres

across Australia, gain the knowledge and tools to construct a diverse portfolio, create an

investment strategy for their fund and ongoing strategies to maintain effective fund performance

through different market environments.


“And, as a result of gaining that knowledge, we now have members who are achieving returns

far in excess of the 4-5% average retail fund performance” he said. 


EDITOR’S NOTES:


What are the Myths, Benefits and Challenges of SMSF?


MYTH: Don’t I need at least $200,000 to manage my own super?

No, around $50,000 is okay to begin with and a husband and wife can combine their super in

the one self managed fund. It costs approximately $1,500 annually in compliance costs – for a

tax accountant and audit – so you need to have a reasonable amount in the fund to bring down

the comparative cost of compliance.


Benefits of a self managed super fund:

o

Control

o

Lower overall costs

o

Tax efficiency – maximum rate of 15%, which can be reduced by smart stock selection in

good quality dividend producing stocks, where the company pays the tax on the dividend

and the fund receives a tax credit (dividend imputation).

o

Full utilisation - in a retail fund, contributions have fees and tax deducted before the

funds are invested. The DIY investor has the ability to fully utilise their fund contributions

until year end.

o

Flexibility to move assets around to make the most of outperforming sectors and stocks

within the market.

o

Protection – ability to protect your portfolio in a downturn and even profit during these

times.

o

Diversification – super funds under your management can be invested where you

believe you’ll get the best return. That might be in property, art, shares, the foreign

currency exchange or rare cars for example. 


Challenges:

o

Education is the key, so you can:

-

Develop the skills of smart investment and risk management

-

Understand your obligations as a trustee of your Super Fund to avoid non-

compliance

o

Time – it does require a small ongoing time commitment - approximately 1-2 hours per

week.


Established in 2000, The Sharemarket College is a Registered Training Organisation. It

provides in-house, on-line and video link training across Australia. It currently has in excess of



MEDIA CONTACT: for interviews with Graeme Rogers and further information please

contact ANDREA SACKSON, 0414 672 318.







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