POWERED BY MOMENTUM MEDIA
Unsuitable SMSF client claims overstated: SPAA
Claims that self-managed super funds (SMSFs) are being oversold to unsuitable clients have been over-stated, according to the SMSF Professionals' Association of Australia (SPAA) education and standards director Graeme Colley.
There was growing evidence to suggest a new-found awareness of how to use SMSFs, he said, citing the Australian Taxation Office's (ATOs) latest SMSF statistics.
"All the evidence suggests the right people are setting up SMSFs and, with the assistance of the appropriate professional specialists, are prudently managing their funds in a responsible way," he said.
The ATO reported 35,276 net new funds for 2011-12, up from 28,031 in 2010-11. Although these were record highs, Colley said the percentage increase in the number of net establishments had been slowing - increasing only 26 per cent for 2012 compared to 84 per cent in 2011.
Colley said the number of fund wind-ups had declined in 2012, from 14,699 in 2010 to 5108 in 2011 to 994 in 2012.
"These factors, together with increases in average SMSF balances, suggest reports that SMSFs are being oversold to unsuitable clients are being overstated," he said.
The ATO also reported a growing number of younger SMSF members, a stable contributions history and investment performance on par with Australian Prudential Regulation Authority (APRA)-regulated funds, Colley said. He said the estimated operating expense ratio of SMSFs had also fallen over the past four years.
The Association of Superannuation Funds of Australia (ASFA) expressed concern that a flaw in the draft proposal for an alternative to the accountants' exemption might give rise to the promotion of SMSFs to unsuitable clients.
It said claims from people who had been improperly moved into an SMSF had increased, according to the Financial Ombudsman Service and a number of legal firms.
AUTHOR
Staff Writer
Money Management staff writers are writers who contribute to the website from time to time. If you would like to discuss the content contained within this article please contact us.
Recommended for you
A recent NSW Supreme Court decision is an important reminder that while super funds may be subject to restrictive superannuation and tax laws, in essence they are still a trust and subject to equitable and common law claims, says a legal expert.
New research from the University of Adelaide has found SMSFs outperformed APRA funds by more than 4 per cent in 2021–22.
The SMSF Association has made a number of policy recommendations for the superannuation sector in its pre-budget submission to the government.
ASIC has sentenced former director Mudasir Mohammed Naseeruddin over four years imprisonment for ‘egregious conduct’ and dishonestly obtaining client funds from six investors’ SMSF accounts.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI First Close USD
66.99 3 y p.a(%)
2
Hills International
62.62 3 y p.a(%)
3
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
32.95 3 y p.a(%)
4
Acadian Global Equity Long Short Class A
32.82 3 y p.a(%)
5
CFS FC Acadian Global Equity Long Short
32.44 3 y p.a(%)
Add new comment