In May an app was launched for iPhones called Superstash, which is marketed as "allowing people to effortlessly establish and administer a self-managed super fund".
Soon the app will be available on almost all mobile phones and browsers. It is billed as the first time a self-managed super fund (SMSF) can be created and managed from a smartphone.
However, it is not really an SMSF in the sense that most people understand it.
That's because, at this stage, investors cannot pick individual shares to hold inside the fund, let alone collectables or an investment property.
Investors are limited to five pre-set investments that have been put together by investment manager Elston, which is a partner in Superstash with SMSF administrator Superfund Partners.
After downloading the app, the investor answers questions concerning their tolerance for investment risk.
In response, the app recommends one of five investment options. It is "robo advice" in that the responses are automated.
Each investment option has a different asset allocation to provide different risk versus reward trade-offs.
The investor does not have to use the investment option recommended but can choose from among the five.
Investors directly own each of the underlying investments.
That's important because in the event of fraud or theft, those with self-managed super fund are not covered by the compensation scheme that covers members of large super funds.
Ownership of the investments rather than owning them indirectly through third parties also eliminates the risk of something going wrong at one of the third parties – whether it be a fund manager, a custodian or an administrator.
The annual administration fees at just under $1000 a year are about half of that usually charged by SMSF administrators.
The lower costs mean that it is probably economic for individuals or couples with at least $200,000 in super to set up a DIY fund rather than the $500,000 normally needed.
Kris Kitto, director of Superstash, says the app is being pitched at younger people and is meant to be like an SMSF with "training wheels".
"It is a big jump from a large super fund to fully self-directed so this bridges the gap," he says.
Kitto says investors can easily upgrade to a full-service administrator like Superfund Partners or another administrator.
Superstash fees and charges are about the same as the large, well run super funds.
But anyone thinking of setting up a DIY fund should ask themselves whether they need to have their own fund at all.
The flexibility of most large super funds is greater than with Superstash.
Most large super funds now offer direct investments.
These include where the fund member can choose to invest in Australian-listed companies, listed investment companies and exchange traded funds.
Anyone who has their super with their fund's default option, which is most people, are required to have some minimum death and total and permanent disability cover.
Superstash does provide insurance but its offerings need to be compared with the insurance of the large funds, where the insurance is cheap and there is no need for a medical examination.
Twitter: @jcollett_money
