Investors seeking alternative options in the ASX 200 financials sector are turning their attention to self-managed super funds (SMSFs), which are experiencing significant growth. The total balance of SMSFs recently surpassed $1 trillion, with a notable increase in the number of funds being established, particularly among younger age brackets.
This surge in SMSFs is being driven by Australians desiring more control over their retirement savings, prompting a shift from traditional super funds to self-managed options. This trend has created a major opportunity for ASX 200 wealth management platforms like Netwealth and Hub24, which are capitalizing on the movement of financial advisors and clients towards these platforms.
While the big four banks remain at neutral or overvalued status, Netwealth and Hub24 are positioned to benefit from the rapid expansion of SMSFs. Financial planners are increasingly transitioning clients to these platforms, leading to substantial inflows of funds into Netwealth and Hub24, as reported by the Australian Financial Review.
Both Netwealth and Hub24 have demonstrated strong performance, with Netwealth shares up 106% over five years and Hub24 shares soaring by 490%. Macquarie Group has set price targets for these stocks, projecting potential upside for Netwealth shares and stable performance for Hub24 shares in the near future.
As investors explore diversification options beyond the big four banks, the growth potential of Netwealth and Hub24 in the context of the expanding SMSF market presents a compelling investment opportunity. With Australians increasingly seeking greater control over their retirement savings, the trajectory of SMSFs and the success of wealth management platforms like Netwealth and Hub24 are indicative of evolving trends in the financial landscape.
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