New Australian DIY fund trustees are getting younger and demanding more superannuation services online – forcing administration companies to improve their technology to meet customer requests.
Natasha Fenech, managing director of AMP's self-managed super fund business, said improving digital services for trustees will be a key focus for this new financial year.
"Most of the growth of the SMSF industry is actually coming from the younger demographic of 35-45-year-olds," she said. "They want to interact more online."
Ms Fenech's comments come after statistics from the Australian Taxation Office showed the age make-up of DIY fund trustees has changed – with more than 60 per cent now aged between 34 and 54, nearly double the 36 per cent in July last year.
The number of funds in the $560 billion market has ballooned from 400,000 in June 2009 to nearly 530,000 in March this year, controlled by more than 1 million trustees.
Head of financial services at CoreData Kristen Turnbull said the early movers to SMSFs were pre-retirees and older trustees who had large, established asset balances and also were setting up the fund because they wanted to take back control and flexibility.
"We're seeing SMSFs appealing more to a younger demographic, and many are seeing it more than just a savings vehicle but one that has an advice proposition that goes with it as well," Ms Turnbull said.
Data from research house Investment Trends showed that those who are interested in setting up an SMSF in the next 12 months are, on average, 44 years old. However, they may not get around to setting one up for a couple of years, according to senior analyst Recep Peker.
Ms Fenech said AMP was looking to consolidate the company's IT systems, including its front and back-end functions onto a single platform. This would feed into the division's strategy to improve its digital interaction with customers.
"[Trustees] want to have the ability to interact with you digitally, and at times they want to be able to pick up the phone, and at [other] times they want to be able to see you face to face," she said. "You have to enable that transaction to happen. For us, that's the change that we need to bring into play, we need our channels to be seamlessly integrated into one another."
AMP launched its SMSF business two years ago following the acquisition of DIY fund administrator Cavendish. The company also owns Multiport and Super IQ, and now controls about $18 billion in funds under administration.
The wealth giant, which has a market value of $17.24 billion, provides administration services to 15,173 funds or about 4 per cent of the highly fragmented market.
AMP boss Craig Meller said earlier this month that the company had primarily grown its DIY arm through acquisition but would now concentrate on organic growth.
Ms Fenech expects the number of funds to grow by 5 per cent to 7 per cent each year.
The growth comes at a time when one in four small business owners want to set up an SMSF to maximise tax breaks on super.
DIY funds now own $68 billion worth of commercial property, largely because of the range of incentives for small enterprises to hold their business premises through their super fund.
