Last week, the executive leadership of ASIC appeared before the Parliamentary Joint Committee on Corporations and Financial Services.
ASIC’s chair Greg Medcraft expressed concern for those SMSF trustees who don’t understand what they’re “taking on board” by setting up an SMSF.
“Regulation comes with protection because if the money is lost because of fraud, there is compensation because that is the deal. If they go off road, it’s individual responsibility,” Mr Medcraft said.
“I do think it’s really concerning that people don’t often understand what they’re taking on board and that they need to think about the time [involved], they need to think about their own skills to take it on, it’s really important.
“The big thing I’d like to emphasise is [the] level of personal responsibility when you become a self-managed super fund – you take personal responsibility for managing that fund, and it’s important.”
ASIC commissioner Greg Tanzer suggested ASIC is set to announce the outcome of Consultation Paper 216 in the near future, which proposed additional disclosure requirements for advisers with prospective trustee clients.
I am still incensed by these ASIC comments. “Off Road” as you put it you will find Australia’s leading superannuation professionals.
Lawyers, accountants, smsf specialists and administrators with real qualifications and invaluable experience. These are the true “gate-keepers” of the smsf industry that you would so easily dismiss.
The alternative, “on-road” are your government regulated financial planners who you would have us believe that once you clip their ticket become a specialist in superannuation, taxation, compliance, insurance, estate planning and investments.
Legal, accounting & smsf professionals work all of their lives developing skills in but one of those disciplines, which is why we find it impossible to accept that a “financial planner” can actually exist. In reality, it is just an ideal, a word the Govt made up to fill a gap in the mind of the public.
Did ASIC just give personal or general advice here, and did he need an AFSL to give that advice to SMSF Trustees? I suppose who knows any more.
I understand where he is coming from but with the success that ASIC has had over the last however long, I am not sure that the protection he is referring to and that ASIC is supposedly watching over, is actually that good. But I could be wrong.
..and another thing Mr Medcraft.
I agree that money is definitely lost by fraud on investors, but not just on SMSFS.
Investment & roll-over fraud is perpetrated by planners and investment companies regulated by you at ASIC & your buddies down at APRA.
Don’t patronize SMSF trustees or any investor because they think you and APRA are keeping a watching brief on investment houses and FP’s. You are too slow to act, whistle-blowers are ignored.
Stop misleading the Parliamentary Committee with your value judgements about SMSFs & look at the facts.
So you “..do really think that” do you Mr Medcraft? Well thats your personal opinion, how about some facts? You are part of the financial planning system, a nanny like state of regulation created for an industry of FPs incapable of self regulation, ethics or discipline so it seems.
How about those facts:
1. > 90% of smsfs dont use a financial planner
2. > 99% of financial planners do not even come close to having the taxation and compliance skills to advise on smsfs
3. Almost all SMSFs are established “off-road” as you so colloquially put it, by accountants & lawyers, without the need for “recommendations”, on an “execution only” basis.
4. ALL Government inquiries to date prove that Australians are smart enough to know what they want, do the research and set-up & run an smsf successfully.
Just another example of large financial institutions lobbying Govt to prevent leakage of superannuation funds to SMSF.
Its has nothing to do with Trustees ability as the majority of SMSF are well monitored by accountants and auditors – its about access to SMSF funds.
I think SMSF should not be tarred with the same brush, most understand their responsibility. ASIC are obviously being lobbied by industry funds and banks who want The SMSF funds to profit from.