smsf

Average Aussie lost $3000 in super last month
Record monthly low
Funds shed $190 billion in past year
THE average Australian lost $3000 in superannuation last month as global stock markets continued to take a battering.

Australia's super funds have lost $190 billion in the past year.

The major super funds went backwards 17.6 per cent over the past 12 months - losing an additional 6.6 per cent or $60 billion in October - the biggest single month loss on record, Super Ratings managing director Jeff Bresnahan said.

He said the $1.1 trillion in Australian super funds had taken major hits over consecutive months.

"The turmoil in global markets has meant that even with a diversified asset base, balanced investment options in Australia's super funds have experienced losses in nine of the past 12 months," Mr Bresnahan said.

"A lot of them have taken a fairly defensive position in that they are accumulating cash, they haven't been putting more funds into the market.

"There are now billions of dollars sitting on the sidelines."

Mr Bresnahan said the longer-term picture was rosier: "Despite all of the market decimation, medium to long-term results for balanced investment options are holding up reasonably well, with both the five and 10-year results showing compound annual returns of 6.67 per cent and 6.37 per cent respectively."

He said the crisis meant super funds were facing their biggest challenge since the introduction of compulsory super in 1992.

"With short-term losses at an all-time high, funds are faced with the challenge of communicating the effect of one of the world's biggest ever financial crises to an, at times, financially illiterate consumer."


http://www.news.com.au/dailytelegraph/money/story/0,26860,24702073-5015795,00.html


Why should anyone pay fees to a big super fund? Just wondering are there any disadvantages to setting up SMSF? What costs are associated with running one?

Thanks in advance.