In an update on its website, ISA advised superannuants they should have “a very keen interest and strong knowledge of the stock market and investments” if they are to start an SMSF.
ISA also suggested potential trustees should be able to ensure they will have the capacity to stay abreast of the frequent changes to SMSF rules and regulations made by the Australian Taxation Office, and point out they will need to purchase additional insurance to replace the cover they may have in their existing fund.
ISA also cautioned that SMSFs are less protected than other super funds in the event of theft and fraud, saying “many SMSF investors [have lost] their life savings when they have been the victim of fraudulent activity.
“While an SMSF might give you more control, it comes at a significant cost in time and money that you wouldn’t ordinarily pay, especially if you were with an industry super fund.
“You also have to deal with more red tape. There are strict Australian Taxation Office rules about setting up and managing your own super fund. And even if you receive incorrect advice from a professional, the ultimate responsibility for the fund still rests with you.”
Can the ISA please quantify what “many SMSF investors” who have lost their life savings is? Is it 1% of all SMSF’s is it a fraction of 1%. What is “Many”
There is also this constant attempt by ISA and other opponents of SMSF’s to make out you are totally on your own in dealing with ATO regulations etc when obviously you can employ an accountant or planner to assist with this.
There are also obviously plenty of accounting services that can do the admin of the fund quite cheaply including esuperfund who do it very cheaply. They can’t keep pretending these organisations don’t exist.
I think also in their press release they claimed people need to set aside 2 hours a week to run their SMSF. Why? This shows more about their mindless mentality of trading shares furiously to match indexes or latest fashionable thinking exactly what SMSF people are trying to get away from.
a strong knowledge of the stock markets and investments. why would you need that to lose the money that the Industry Funds have lost in the past four years.
$500,000 – a load of rubbish
What a self serving piece of commentary. Clearly there are people who SMSF are not suitable for but the comments fail to identify them and the reasons why. Another Industry Super propaganda piece. An SMSF with $200k can invest in a prudent manner, pay an adviser and compliance costs, and still be in front of non-SMSF solutions. Investing appropriately with the appropriate advice and a plan is the key. Structure is secondary and a simple cost benefit calculation.