In the latest SMSF Adviser podcast, Dunn said the decision to carve out superannuation from the CGT rules applies to the whole superannuation sector, of which SMSFs represent only a quarter.
“We are going to see the benefits of holding assets for greater than 12 months, where a fund gets a third discount, apply to an SMSF as much as it does with an APRA regulated fund,” he said.
“Additionally, there is the fact that when you’re funding pensions, the income tax rate will reduce in a superannuation fund for a self-managed fund as much as it will with an APRA-regulated fund, so these are not things that are isolated to self-managed funds.
“Therefore the conversation needs to be broad because in superannuation, and whether the tax settings are correct for superannuation, you can’t pick and choose.”
Dunn said one of the key advantages of SMSFs is the choice and control trustees have regarding when and how they decided to buy certain assets.
“Control is all about the timing of decisions that you make. If you decide to sell that asset after 12 months, then the fund will be entitled to a discount. If you decide to sell that investment in retirement phase, there will be an element of exempt current pension income that it is entitled to,” he said.
“The fact is that there are the issues that have arisen here again around unscrupulous advice, and again this comes back to regulation of the sector, of which ASIC should have the resources given to it, if it doesn’t have it already, to try and stamp this out and stamp this out early.”
Dunn said the discussion should really be focusing on the advice framework rather than whether SMSFs or APRA funds get a better deal.
“The problem that we have at the moment, again, is that we have a limited number of resources for people to be able to go and seek advice, and the fact that we have an advice framework that is still unresolved,” he said.
“We have a limited advice framework that is basically now non-existent. We have an advice framework that the former minister was intending on finishing, but he’s now left parliament. We’ve had all these issues of the Shield and First Guardian and they’ve sort of caught the attention of the new minister, Dan Mulino.
“But the problem is we keep moving away from fixing the foundations of advice, and ultimately the more opportunity that people have to be able to seek that advice, then the less they’re going to be relying upon the online spruiking of influences or being able to at least go and check prior to going in and undertaking an investment.”
Dunn continued that there needs to be continuing push and advocacy for the role of advice and the need to be able to support people.
“At the same time we are targeting the issues that we see in the marketplace, because the more the Government keeps jumping around from Shield and First Guardian to property brokers we’re not actually fixing the underlying problem, and we’re just going to keep going around in circles,” he said.
“There needs to be a real push to get this whole advice process fixed, unlocked. It might not be perfect to start with, but let’s get it going, and then improve on it as we go along, because we’ll provide more people with the opportunity to hopefully then make the right decisions.”
