ASX listed equities are statistically the most common asset in an SMSF and this is reflected in the hundreds of SMSF accounts I review each year. A common question I ask my clients is “do you have an adviser or a broker?”
I get mixed answers to this question. Some brokers call themselves advisers but only provide investment advice, occasionally investment research or IPO access and execute trades. Some brokers act purely on an ‘execution only’ basis – they solely action share trades on behalf of trustees.
My point is that these traditional style brokers have their place, but they are very different to a financial adviser that provides broad advice across your overall financial life. This means that sometimes you can miss out on key strategic advice or truly getting the right advice that suits your needs because your ‘adviser’ is purely focussed on your investments – not you as a person!
In the day to day administration of our client’s super funds we sometimes have to ask trustees questions in relation to structure, strategy and investments. Lately I’ve come across a grey area where clients assume they have an adviser (because that’s what’s written on their business card) only to discover that they really only have a broker. Whilst the job of a broker is a common and valid inclusion in the running of a self-managed super fund, my concern is that some trustees are led to believe that they are having their fund monitored holistically when in reality only their shares are being reviewed.
At Superfund Partners we welcome choice in regards to trustee’s preference of investment and advice professionals, however we would encourage trustees to analyse what these professionals bring to the table and where there may be a need to re-evaluate relationships to ensure that all matters pertaining to the running of a self-managed super fund are taken care of. By all means have a broker – they can be a great resource, but know what they can and can’t help you with. The takeaway from this is that it’s not about an adviser being better than a broker or you should choose one or the other, as every trustee has different needs, it’s more about trustees engaging with their professionals and understanding who’s who in the zoo and what each player provides.