CareSuper chief executive Julie Lander told SMSF Adviser there are a large number of people who realise after they have established an SMSF that the structure is not suited to their needs.
“Lots of people’s circumstances change and that means even if it was right for them in the beginning, it may not be the best outcome for them now,” said Ms Lander.
She added that when people first establish SMSFs, they often don’t consider how they will wind them up.
Ms Lander gave an example of a husband starting an SMSF who also puts his wife’s super into the fund.
“If the husband gets sick or dies, the wife is then left with such an entity,” she said. “It is often the person who hasn’t set it up and hasn’t taken that day-to-day interest who is left with these things.”
What often happens in these circumstances, Ms Lander said, is the trustee will simply start going into cash or other managed funds within the SMSF, which is highly inefficient.
“You just don’t need that sort of structure for those kinds of investments,” she said.
Ms Lander previously told SMSF Adviser that trustees are often unaware of their investment returns, and put capital movement aside and only concentrate on dividends when buying shares.
“From the conversations I have had with people with SMSFs, you can see that they are a bit like punters,” Ms Lander said.
“They will tell you about the shares they bought that went up in price, but they don’t tell you about the ones that fell in price [so] when you ask them ‘what did your super fund return last year?’ they actually don’t know.”
When I read the title of this, I thought “what a smart industry fund”. When I read Ms Landers’ unfounded derogatory generalisations about SMSF trustees, I thought what a good job that this idea can be taken up by any other industry fund because I wouldn’t touch CareSuper. If that’s what they think of trustees, imagine what they think of their members.
I’m with you Piers. Things must be pretty desperate as the money flows out the door to smsf’s. They can’t get the basics right let alone a complex area such as smsf. No wonder they arrived at this brain wave given the inability to provide what clients want. Reminds me of the last few desperate flaps of a fish in an evaporating pond.
Wow, from the latest stats it would seem they are very good PUNTERS then Ms Lander!
Interesting to see Industry Funds take this initiative
Well I cant wait to see how care super will wind up SMSF’s. I surely hope they don’t think they can do that as phone advice without a full SOA and without considering all of the non clients facts. Both the members and the Trustees. It will also be interesting to see how they go about advising where the SMSF should rollover its funds. I hope it is not advised to just invest these funds in care super without a proper analysis of all the other possible options, other industry funds, retail and even conversion to an APRA fund. Now how will they get the appropriate information for all of this to make the correct decision. I hope ASIC have seen this article and are taking due notice and will do the appropriate investigation once care set it up.
If a trustee gets ‘left with such an entity’ can’t they seek advice?
Would utterly be that CareSuper can’t (or don’t) advise on SMSF’s……