Gadens partner Kathleen Conroy told SMSF Adviser a significant issue in the SMSF sector is trustees’ lack of knowledge about SMSFs.
“I would say 90 per cent of the clients that I speak to about SMSFs do not understand it, they don’t understand the basic concept and certainly don’t appreciate their obligations as trustees,” she said.
“So, one of my big things is that there should be compulsory advice or education for trustees; it will make them stop and think before they jump right in.”
According to Ms Conroy, people are stepping in as trustees when they have no idea of their responsibilities.
“They don’t know the law. It is not that people are setting out to be criminals; they just don’t realise they are not complying,” she said.
Ms Conroy added that the regulations surrounding SMSFs are not problematic, but trustees’ lack of appreciation for their obligations while holding an SMSF is.
“In my mind, the [SMSF] legislation is quite strict and very comprehensive and it is worth asking the question… is it regulation that you should be concerned about or compliance?” she said.
“I am not saying [the legislation] is perfect by any means and there are certain things that could be looked at, but as a whole, the legislation is there,” she added.
I advise on many superfunds as an accountant primarily and as a financial planner in relation to their investments.
I can honestly say that none of my funds have had any real problems adhering to the law. Trustees are educated in my office before they take on their responsibilities and this works well for me and my clients.
I think that this compulsory education idea will only add time and cost to a system which is working well. How many trustees are not doing the right thing?
It seems to me that the big end of town is using super for its own interests.
Forget the trustees. I believe a higher priority should be the education and qualifications of financial advisers given the ease with which you can become one and thus the potential to cause great harm to a smsf.
The paternalism of the bureaucrats, public and private, towards the ordinary person never ceases to amaze.
As for defending the ridiculous over-regulation in the SIS Act!
I would love someone to explain how an entity can be an associate of itself, yet that is what badly drafted literal meaning seems to say.
Where is the logic in preventing an SMSF funding a 100% owned subsidiary to conduct a business with limited liability?
There are many other silly things in the SIS Act.
The more silly regulation and tax scares that super gets hit with the more people will look to other investment strategies both here and overseas.
They do exist and with more security of property and less sovereign tax risk.
Wow!! 90%!! That is an indictment on someone (accountants, financial planners) for not education their clients. Bit what is really funny is that, as far as I know, real estate agents do not have any FOFA exemption and yet they go on with all sorts of advice. Have they been prosecuted? Prevented?
[quote name=”Cam”]….
These education ideas seem to be thrown up either by large funds trying to slow the loss of members or by people who could profit from running education programs. The ethics is dismal, and is pretty much a legal version of breaking into my house and stealing my wallet…..[/quote]
+1
A conspiracy by the industry and retail funds Cam ? .. say it isn’t so! If you listen real hard on some days you can almost here the forehead slapping of commission driven advisers as they watch the steady stream of funds under management going out the door .. LOL!!
The exact same argument could be made about companies, trusts and partnerships involving in some cases vastly larger sums of money and affecting even hundreds of people not a maximum of 4. Yet we don’t force people to do this because it is just another needless cost to fix what actual real problem? Where are all the horror stories after horror stories to support this constant propaganda campaign by vested interests?
Just once it would be nice to read an article about some otherwise vested interest arguing for a change that lowers costs for SMSF trustees. Just once.
There are resources there available for people to read, how about trusting people to make their own judgment about how much they need to educate themselves or consult their adviser.
Should every company director have to do an education program prior to becoming a director? What about every trustee of a trust – there’s heaps of complications there. Come to tghink of it, the tax act is even more complex – maybe we should all do an education program prior to becoming a taxpayer.
SMSF trustees pay specialist advisors good money to get it right, just as a taxpayer signing the ELD has paid good money to a tax agent and doens’t need to be eductaed, or even a homeowner getting work done by a specialist.
These education ideas seem to be thrown up either by large funds trying to slow the loss of members or by people who could profit from running education programs. The ethics is dismal, and is pretty much a legal version of breaking into my house and stealing my wallet.
Another day …Another dollar … Yet another lawyer spreading fear, uncertainty and doubt.
King Solomon (the wisest man who ever lived) was correct when he said there is nothing new under the sun .. Ecclesiastes chapter 1 verse 9 for those of you with a Bible 🙁
providing Miss Conroy extends her comments to the directors of the trustee companies of industry funds I would agree. Especially those trustees/directors who alow the export member details to their sponsoring union(s)