Cash still king for cautiously optimistic self managed super funds

5 March 2010

A survey conducted by UBank of customers with Self Managed Super Funds (SMSF) has found more than half of all participants have no plans to alter their current cash allocation despite improvements in economic conditions in Australia.

The survey by UBank, NAB’s direct bank, found that 66% of participants said they were influenced by the global financial crisis when balancing the cash component with other asset classes such as equities, property and managed funds. Asked what proportion of their SMSF was held in cash, more than a third said over 50%.

While a significant proportion of participants blamed poor performance and high fees of managed funds for their move to a SMSF, 75% said that having control of their own financial destiny was the key factor that drove them to set up their own super fund.

Gerd Schenkel, General Manager of UBank, said: “The results of this survey show that more and more people want to take tight control of their own financial destiny at a time of ongoing caution about the economic climate. That caution is also reflected in the fact that people are reluctant to reduce the cash component in their SMSF despite economic data suggesting Australia has weathered the storm relatively well.

“We found that UBank’s Self Managed Super Fund customers prefer to balance the risks associated with equities with the certainty that a term deposit, with current rates as high as 6.36% p.a., provides.”

Other key findings of the survey included:

  • While 31% of participants said they were optimistic about the performance of their SMSF in 2010, 26% said they still felt cautious about the year ahead
  • 95% of respondents have no thoughts of closing their SMSF to return to managed funds
  • 59% like the flexibility that an SMSF provides
  • Nearly half of all respondents claim the media influences their decisions about the allocation of their investments between cash and equities

“At UBank we aim to provide online products and services that are low cost and easy to use. Our Term Deposits meet those requirements as well as offering guaranteed returns of up to 6.36% - something that can’t be sneezed at during a time when the stockmarket continues to be buffeted by offshore economic concerns,” Mr Schenkel said.

For further information and full report details contact:

Megan English
FD Third Person
02 8298 6100 or 0414 762 430
Gillian Griffiths
NAB Corporate Affairs
0419 667 783

About UBank:

UBankwas launched in October 2008 and is developed and backed by the financial strength and capabilities of NAB. Although a part of NAB, the ideas, people, philosophy and brand are uniquely UBank.

UBank aims to simplify banking – being entirely online and supported by a 24/7 Australian based Direct Banking Centre means there are no fees and no queues.

UBank currently offers the USaver high interest online savings account and a range of Term Deposits (which can be used by Self Managed Super Funds), with new products under development.

USaver Online Account:

Winner of the Money Magazine award for Best Online Savings Account 2010, the UBank USaver offers a high interest rate and the ability to easily access money. USaver helps you set savings goals - and reach them.

With every USaver account, customers get:

  • High interest rates - calculated daily, paid monthly, and no fees
  • An Automatic Savings Plan option that makes regular contributions from another Australian bank account. Set up a monthly Automatic Savings Plan for $100(or more) and receive a Savings Bonus of 0.10%p.a. for balances up to $150,000
  • Our useful Goal Tracker online savings tool
  • Savings Buckets, create different accounts for each of your savings goals
  • No minimum amount and a maximum balance of $1 million dollars per customer
  • Deposits up to $1m government guaranteed (limit applies to total funds deposited by NAB)

Term Deposits:

A UBank Term Deposit provides the security of a fixed rate. There are 1, 3, 6, 9 or 12 month terms and if the deposit is rolled over at the end of the term, UBank will reward a 0.10% p.a. Loyalty Bonus. You can also set up a UBank Term Deposit for Self Managed Super Funds.