Due to some bad publicity in recent months, could the tides be turning with regards to how people are looking at robo advisors? Some are now calling them robo predators.
This was in the news out of Austarlia:
Australian regulators are concerned about whether SMSFs need-protection-from-robo-predators?
What are the concerns raised that led to this term “robo predators”? Could this spread over to the West?
Had not heard about them but the term Robo Predators could be a favourite buzzword. Fintech can be good or bad.
Interesting article. In our experience, SMSFs in Australia are wholeheartedly embracing digital wealth solutions. We are experiencing a 30%-40% adoption rate through the accounting network.
@SelfWealth can you help us Westerns understand better the SMSF market in Australia? How large is it and what are the inefficiencies that Fintech can adress?
Hi @Efi. The Self Managed Superannuation/Pension Fund (SMSF) market in Australia is quite substantial. Australia has the 4th largest superannuation/pension fund pool in the world - $2.3 trillion and the SMSF share of that is 35% ~ $600 billion.
This is driven by Australia’s compulsory superannuation guarantee. Each employer in Australia must pay 9.75% of each employees salary into their nominated superannuation account.
SelfWealth is currently addressing the concerns in the SMSF market, by removing high fees and commissions, creating a peer-to-peer investing community to these self-directed investors who are out on their own not wanting any advice.
Other Fintechs are also attacking the other two superannuation pools (Industry Funds and Retail Funds) each holding around 33% of the total pool. Early days, but the banks/larger financial institutions are staring to take notice and either looking to integrate these fintechs into their own businesses or take an equity stake in them for insurance.
Thanks @SelfWealth for clarifying the three pools in Australia:
- Self managed
- Industry Funds
- Retail funds
Your knowledge also lead me to open a new topic, on which countries actually have Self-Directed Pension Funds, which is a democratization in investing (albeit not tech).
It would be great to get a list of those countries, as these self managed pension funds are screaming out for help on how better to invest, have a like-minded peer group to guide them. Perfect for FinTech startups to engage and deliver and to solve these problems.
USA can be self directed 401k if you jump through some hoops