Don’t we all love a personality test? If you’re a SMSF trustee, this may be of particular interest to you.
In 2011 three main types of SMSF trustees were identified in research, including “controllers,” “coach-seekers,” and “outsourcers.” If you’re a trustee, you’ll probably recognise attributes of yourself in a number of these, as most trustees are a combination, rather than rigidly personifying just one type.
You could say these mirror the three distinct groups found in most professional service environments – the DIY crowd, “do it with me” client, and “do it for me” client.
Let’s review these three types more closely.
Controllers – “I’ll Do It”
As the name suggests, this group of trustees prefer ultimate control over their retirement savings and have the confidence to manage it themselves, with little to no outside assistance. They’ll utilise their own support and resources to keep things running smoothly and under control.
In 2011 more SMSF trustees fell under this group than the others, with controllers accounting for around 40% of the SMSF trustee population (however this has changed significantly since).
Coach-seekers – “Do It With Me”
These trustees still prefer to exert control over their retirement savings plan, but also value informed guidance and specialised expertise from an experienced mentor or practitioner who can put their fund ahead of the pack.
The research found that these trustees “seek external affirmation for their decisions, and while they would rather do things themselves, they need information and support in their decision-making and are often looking for someone to help or mentor them”. Coach-seekers understand they can get a lot further, a lot faster by utilising the expertise of others and will consult these experts for the best performing strategies in the current environment.
Outsourcers – “Do It For Me”
Outsourcers represent the smallest group of SMSF trustees. They would rather leave the management of their retirement savings to “the experts” and tend to delegate it to someone else altogether.
In 2011, the breakdown of the SMSF trustee population was 40% controllers, 25% coach-seekers and 14% outsourcers, which was to be expected considering SMSF are most attractive to those who, in fact, like to ‘self-manage’.
It was estimated in the research that the overall general population broke down quite the opposite with 20% controllers, 30% coach-seekers and 50% outsourcers, as most of these individuals delegated their super management entirely to a super fund, rarely even glancing at their progress reports.
But…Things Are Changing
The latest study paints a picture of a sector that is experiencing great change. The representative proportions have shifted quite significantly, with coach-seekers now comprising of a huge 46% of the SMSF trustee population – almost doubling in size. The proportion of controllers and outsourcers, however, have remained very similar.
What does this mean for service providers and product suppliers to the SMSF market?
Essentially, these products and services will need to undergo a change in positioning to attract the growing market of individuals who prefer a “help-me-do-it” approach and seek to be educated and guided in this specialised area.
The report also highlighted the emergence of a much younger demographic of SMSF trustees, who want a ‘a one-stop shop to service their requirements’. SMSF trustees are also living longer, which needs to be taken into account in the planning process by SMSF professionals.
Interested in switching to a SMSF?
Find out more about the benefits of a SMSF or contact TWD on 1300 893 000 to find out how we can become your SMSF coach