A majority of respondents to an SMSF Adviser straw poll, along with the SMSF Professionals’ Association of Australia (SPAA), have said they do not support compulsory training requirements for SMSF trustees.
In response to the question, ‘Should SMSF trustees be required to have accredited training prior to establishing an SMSF?’ 58.8 per cent of the 199 respondents voted no. The remaining 41.2 per cent of respondents voted in favour of compulsory trustee education.
SPAA’s chief executive officer Andrea Slattery told SMSF Adviser compulsory education for trustees is unnecessary, adding that research confirms 75 per cent of trustees have at minimum an undergraduate qualification.
“All the reviews that have occurred in the market and all of the responses to those reviews have shown the SMSF market, and trustees in particular, are performing well and managing well,” Ms Slattery said.
“This industry [has] a high level of professional advice and engagement, plus it meets all of the government objectives of adequacy, sustainability longevity, gender balance, engagement and choice,” she added.
SPAA does, however. support proposed penalty powers which would allow the Australian Taxation Office to direct trustees to compulsory education if they are found to not understand their roles and responsibilities.
“We believe that’s all that’s needed as far as compulsion; SMSFs are shown to be going quite well and all the research is showing that they are well-educated professionals, executives, small business owners or self-employed,” Ms Slattery said.
Conversely, responding to questions on notice following a recent Parliamentary Joint Committee on Corporations and Financial Services, the Australian Institute of Superannuation Trustees (AIST) recommended SMSF trustees should be required to have accredited training prior to establishing an SMSF.
“Our key point is that SMSF trustees should undertake structured education on their legal responsibilities and obligations when commencing their SMSF,” AIST chief executive officer Tom Garcia told SMSF Adviser.
“We also recommend that they engage in ongoing accredited training to maintain their knowledge. While it’s possible to outsource much of the work involved in running a self-managed super product, ultimately the duties of being a trustee remain and tax penalties apply,” Mr Garcia said.
Similarly, one respondent to the survey agreed trustees should be educated regarding the “dos and don’ts” of operating an SMSF.
“Trustees need to be made aware of the preservation rules as well as following an investment strategy and the need to review the investment strategy over time,” said Ron Malafiej.
“Too often, trustees do not seek advice when making investment decisions and concentrate investments in a single asset class (eg direct property) without considering the need for diversification,” he said.
“Educating trustees would provide trustees with a clearer understanding of their responsibilities and obligations in administering their SMSF.”
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