In an interim FSI report handed down this morning, the panel – which is chaired by former CBA boss David Murray – raised a number of issues in the financial advice sector that it is examining closely, requesting additional stakeholder engagement.
In particular, the panel is seeking feedback on raising the minimum education and competency standards for personal advice, including particular standards for more complex products or structures, such as SMSFs.
The panel also observed that, if allowed to continue, growth in direct leverage by superannuation funds may create vulnerabilities for the superannuation and financial systems.
“The general lack of leverage in the superannuation system is a major strength of the financial system. Although direct leverage in superannuation is small, the current ability to borrow directly may, over time, erode this strength and create new risks to the financial system,” the report stated.
FSI fast becoming a self serving instrument of the institutions. Institutions who think they will look after someone’s money better than they can themselves. Aren’t they the same ones who lent money to pensioners to invest in Storm, participated whole heartedly in wholesale fee generation that brought us a GFC?
SMSF in particular should not be part of the FSI as no one involved in it has any genuine understanding of what drives it and most have vested interest in SMSF being eliminated.
Yes there is abuse in SMSF but you need enforcement activities targeting the spruikers who make themselves easily known through a simple Google search.
I totally agree with Jo, I think David Murray should have demanded higher academic qualifiacations of his staff. If there was less focus on shareholders returns and more on best interest of clients many of the issues we are facing today would have been averted. The banks have alot to answer for so might be good idea for David and other former and current CEO’s to do some refecting, and start accepting they were a major part of the problem & accept responsibilty for the mess they has contributed to.
I would how many SMSF’s that are under 5 years old have borrowing’s for residential properties(i.e for units of the plan) compared to the longer standing ones more established ones. In recent weeks I have heard of at least 5 different planning/property groups just targeting this for multi-density living projects.
This I believe is where the risk is for the less experienced lies.
Also wait till they see what the actual costs are to manege and run to a SMSF with LRBA’s.