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Women not as confident as men when running SMSFs

by Alexandra Cain | 17 Mar 2016

Research by CBA and the SMSF Association has found that, although women make up 47 per cent of Australian self-managed super fund (SMSF) trustees, they are significantly less confident than men when it comes to managing their SMSF. According to the results 83 per cent of men feel confident running their SMSF, versus 62 per cent for women.  

The report surveyed 801 SMSF trustees, and 535 consumers without an SMSF, to understand investors in the SMSF demographic. 

Greg Einfeld, director of SMSF specialists Lime Super, says the most common SMSF structure is one owned by a husband and wife. This prompts certain typical behaviours among SMSF trustees.   

“Usually one of the trustees will take a more active approach in decision making than the other, and more often than not it is the male that takes a more active role,” says Einfeld.   

“However, there are also many funds where the female takes a more active role. The person who takes a more active role usually does so because he or she has more financial knowledge or experience, enjoys being involved more and has more time on his or her hands.” 

According to Einfeld, it is important for all trustees to discharge their duties properly, even if they are not actively involved. “For this reason all trustees must be aware of what is happening in their SMSF.” 

He encourages passive trustees to become more involved and participate in meetings with the fund’s accountant and financial adviser, and request that decisions are not made without their involvement. He also points trustees in the direction of education courses run by the Australian Taxation Office and SMSF Blueprint, which specialises in trustee education.  

A common issue with SMSFs is when a married couple are the trustees and the husband dies before the wife. The upshot is that many women who have not been actively involved in the SMSF suddenly become entirely responsible.  

Einfeld encourages women who are SMSF trustees to take an ongoing interest in the fund or look into appointing a financial adviser to ensure it continues to be well managed.  

“Alternatively she could choose to wind up the SMSF and move to a public offer fund. The last of these options would be unfortunate because it means selling assets, being un-invested for a period of time, and possibly incurring capital gains tax.” 

Peter Horsfield from SMART Financial Advice says in his experience women tend to establish an SMSF after attaining a large sum in their employer super or industry super fund from an event like a redundancy or retirement. They can also be thrust into the management of an SMSF due to a relationship breakdown or, as previously discussed, the death of their partner. 

“I have found women approach SMSF trustee responsibilities differently. While men are mostly focused on accumulation, women focus more on the management, complying documentation and administrative tasks of owning and operating an SMSF. This approach makes women better SMSF trustees than the opposite sex,” he argues. 

In terms of the difference in the investing styles between women and men, Horsfield says the majority of men establishing an SMSF have a clear focus on accumulation. They are looking for opportunities to leverage their superannuation funds to purchase assets and direct money so their SMSF outperforms retail and industry fund managers.  

“The majority of women approach investments more cautiously and conservatively. They tend to be more open to the advice of professionals and ask more specific questions about their situation, thereby taking a more consultative approach to forming their investment strategies and styles,” he says.

 

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