Practitioners reject minimum balance requirement for SMSFs
A majority of respondents to an SMSF Adviser straw poll have indicated there should be no minimum balance requirement for establishing a self-managed fund.
In response to the question, ‘Should there be a minimum balance requirement for establishing an SMSF?’ 53.9 per cent of the 336 respondents answered, ‘No, it should be assessed case by case’.
A further 28.9 per cent of voters answered, ‘Yes, it should be $250,000 or more’, while 6.3 per cent said the minimum should be $100,000. Six per cent said the minimum should be $200,000, and 5.1 per cent said the minimum should be $150,000.
Matthew Jones, owner of Capital 19 Global Investments, told SMSF Adviser that justifying the establishment of an SMSF cannot be limited to balance considerations alone.
“Just because you’ve got a certain amount of money that doesn’t mean that an SMSF is suitable for you. I see a lot of people that shouldn’t have one,” Mr Jones said.
“It’s a personal choice and I’d be reluctant to put a dollar figure on it, because I think the other factors are a lot more important.”
One respondent to the survey, John Williams, said establishing an SMSF should be a mutual decision made by clients and their adviser.
“Prescriptive values are meaningless,” he added.