Jeremy Cooper, the superannuation reviewer not the brewer, has released A Conversation About SMSFs. This document is as refreshing Cooper’s Pale Ale, Cooper even leads off with a Coopers joke.

I encourage all SMSF trustees to read the document, though in summary Cooper says SMSFs are doing well and despite concentrated asset allocations* are performing as good as if not better than other investment vehicles.

SMSFs might be able to aspire to this [excellent performance] because:

• SMSFs can pursue asset allocations that would be difficult to implement in an APRA-regulated fund;
• SMSFs can have longer-term investment horizons (ie not chasing short-term performance driven by league tables and ‘peer risk’);
• SMSFs can be run in a tax-efficient manner, particularly in transition to retirement and in managing assets supporting a pension;
• there is a better alignment of interests in a SMSF – members can make well informed decisions in their own interests with minimal agency costs; and
• members are able to bargain directly for reduced prices for the various services they need (eg accounting, administration and broking).

A favourite line of mine from the conversation is “One approach might be to say: “The SMSF sector isn’t broken so it doesn’t need fixing.” How refreshing is that? It appears Cooper is endowed with more common sense than all our politicians combined.

* 59 per cent of SMSFs, that’s approaching 250,000 of them, held only listed Australian shares and cash/term deposits.

Related posts:

1. Cooper Super System Review Releases Issues Paper
2. Self Managed Superannuation Fund (SMSF) Setup