Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 53

Education for SMSF trustees - what should it really mean?

I constantly read articles in the press and listen to technical experts at conferences telling me that there needs to be more ‘education’ for SMSF trustees. But to achieve what?

No lesser person than Albert Einstein once said, “The only thing that interferes with my learning is my education.” Einstein is understood to be saying that the education system ignores a wide range of subjects required for personal development, humanity and social growth.

There are similarities with ‘educating’ SMSF trustees and other superannuation investors.

Are we teaching the right skills?

As a technical person and an administrator, the questions I am asked are not normally about the duties and compliance obligations of trustees. What people are actually seeking is practical knowledge in managing their portfolios, not ‘education’ rules.

Most of the SMSF trustees I meet are educated people who have been successful in their accumulation of superannuation assets. They may not be doctors or lawyers but they are educated in their chosen career, and the financial rewards have followed. SMSF’s have a higher average accumulation balance than any other form of superannuation and are the largest segment of the total superannuation pool.

The knowledge that SMSF trustees are seeking includes answers to questions such as:

  • What are the tools and services I need to get the best out of my fund and how do I find them?
  • What are the different investments I can use?
  • What are the risks associated with investments and are they applicable to me?
  • Where do I go to hear other people’s ideas?
  • Is there a benefit in borrowing as part of my retirement strategy?
  • When I retire, how much will I need?
  • How do I make sure what is left over when I die goes to my family?
  • Why should I make after-tax contributions into my superannuation fund?

Of course, you need to be licenced to answer many of these questions.

In the 25 years that I have been involved in this industry, no one has ever said to me, “I would like to be the trustee of my SMSF and take on all the compliance responsibilities, please.” SMSF ‘education’ is not primarily about our industry teaching the endless responsibilities of an SMSF trustee, which begins when the ATO’s SMSF booklets on responsibilities and compliance are sent to every trustee.

What we want and need as an industry is for people to retire well and have a sound, comfortable financial future. If we focus too much on every trustee knowing exactly how the Superannuation Industry (Supervision) Act 1993 applies to them in detail, we have lost sight of what is really important.

I acknowledge that members still need an understanding of the SMSF trustee rules. However, I don’t see that as an industry we have done a good enough job of helping people meet their goals.

Where should the industry be heading?

Trustees need to find information which is important and useful to them, and have tools that tailor responses to their personal needs. These might include information on specific shares, managed funds and other investments; opinion articles which encourage thought and debate; or perhaps more complex issues of asset allocation and portfolio construction. We currently expect investors to read everything to find what is useful to them.

Companies like Amazon, Google or Facebook offer the opposite. They have developed search functions which are more in tune with their users’ interests. The more someone refines a search or uses a service, the better these businesses know the personal likes and dislikes. They suggest other books or products which may be of interest specific to the personal characteristics. Users can categorise and search on genres, study suggestions, or browse, purchase, build and edit play lists.

For all the money invested and ASIC controls, the financial industry seems stuck in the dark ages (before ‘i’ became a prefix or we heard the verb ‘to google’). We seem to work on the principle that we need to tell trustees everything there is to know. Einstein’s problem exemplified.

Better decision-making tools needed

Our industry needs to frame responses in ways that are meaningful. This is not the usual communications about how funds outperformed peers in the previous quarter, or the in-house economist taking a guess at future market returns. It is about understanding future goals and the steps needed to reach them.

Consider a simple example. Why don’t super funds include in their statements an estimate of the amount of annual income (expressed in current day dollars) that a client can expect in retirement based on current savings patterns and expected returns? There is little merit in telling a 30-year-old that their super will grow to $1 million in 30 years. That will simply make them complacent, with many not realising $1 million in future dollars will not fund a retirement. But if a client earning $100,000 a year is advised that on current projections, their superannuation will likely provide an annual income of say $45,000, that’s a useful piece of information that may lead to action.

The property market is showing signs of such innovation. For example, the Castran Gilbert website provides tools that enhance the usual search functions. If an investor is looking for yield at a particular price point, the website lists all the properties that fit the criteria. It then provides decision-making tools like rents in the surrounding area, sales and valuations, as well as the usual specifics on each property. Even further, it allows financial modelling on cashflows, lists taxes, provides solicitor contacts and gives online access to contracts and documents. It has taken the best features from existing sites and combined them with a range of decision-making tools to tailor the end result for the user.

A new breed of ‘knowledge’ tools needs to be developed to allow people to find the things that suit them and use them to make better investment decisions. It is hard to find something that you don’t even know exists.


Andrew Bloore is Chief Executive of SuperIQ.


Is your SMSF ready for SuperStream?

Avoid these top five errors in your SMSF annual return

New bankruptcy rules may have a domino impact on SMSF pensions


Most viewed in recent weeks

Is it better to rent or own a home under the age pension?

With 62% of Australians aged 65 and over relying at least partially on the age pension, are they better off owning their home or renting? There is an extra pension asset allowance for those not owning a home.

Too many retirees miss out on this valuable super fund benefit

With 700 Australians retiring every day, retirement income solutions are more important than ever. Why do millions of retirees eligible for a more tax-efficient pension account hold money in accumulation?

Is the fossil fuel narrative simply too convenient?

A fund manager argues it is immoral to deny poor countries access to relatively cheap energy from fossil fuels. Wealthy countries must recognise the transition is a multi-decade challenge and continue to invest.

Reece Birtles on selecting stocks for income in retirement

Equity investing comes with volatility that makes many retirees uncomfortable. A focus on income which is less volatile than share prices, and quality companies delivering robust earnings, offers more reassurance.

Comparing generations and the nine dimensions of our well-being

Using the nine dimensions of well-being used by the OECD, and dividing Australians into Baby Boomers, Generation Xers or Millennials, it is surprisingly easy to identify the winners and losers for most dimensions.

Anton in 2006 v 2022, it's deja vu (all over again)

What was bothering markets in 2006? Try the end of cheap money, bond yields rising, high energy prices and record high commodity prices feeding inflation. Who says these are 'unprecedented' times? It's 2006 v 2022.

Latest Updates


Superannuation: a 30+ year journey but now stop fiddling

Few people have been closer to superannuation policy over the years than Noel Whittaker, especially when he established his eponymous financial planning business. He takes us on a quick guided tour.

Survey: share your retirement experiences

All Baby Boomers are now over 55 and many are either in retirement or thinking about a transition from work. But what is retirement like? Is it the golden years or a drag? Do you have tips for making the most of it?


Time for value as ‘promise generators’ fail to deliver

A $28 billion global manager still sees far more potential in value than growth stocks, believes energy stocks are undervalued including an Australian company, and describes the need for resilience in investing.


Paul Keating's long-term plans for super and imputation

Paul Keating not only designed compulsory superannuation but in the 30 years since its introduction, he has maintained the rage. Here are highlights of three articles on SG's origins and two more recent interviews.

Fixed interest

On interest rates and credit, do you feel the need for speed?

Central bank support for credit and equity markets is reversing, which has led to wider spreads and higher rates. But what does that mean and is it time to jump at higher rates or do they have some way to go?

Investment strategies

Death notices for the 60/40 portfolio are premature

Pundits have once again declared the death of the 60% stock/40% bond portfolio amid sharp declines in both stock and bond prices. Based on history, balanced portfolios are apt to prove the naysayers wrong, again.

Exchange traded products

ETFs and the eight biggest worries in index investing

Both passive investing and ETFs have withstood criticism as their popularity has grown. They have been blamed for causing bubbles, distorting the market, and concentrating share ownership. Are any of these criticisms valid?



© 2022 Morningstar, Inc. All rights reserved.

The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. Any general advice or ‘regulated financial advice’ under New Zealand law has been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892) and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. For more information refer to our Financial Services Guide (AU) and Financial Advice Provider Disclosure Statement (NZ). You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.

Website Development by Master Publisher.