Superannuation software provider CleverSuper is “offering a free SMSF to every Australian”, saying the notion of a minimum asset base 'entry barrier' for prospective trustees is outmoded.
CleverSuper chief executive Chris Appleyard, who also heads non-institutional financial planning group Custom Wealth Solutions, is calling on more than 100,000 Australians to sign up to the campaign and obtain a free SMSF through CleverSuper.
“CleverSuper has the ability to offer every Australian a free SMSF to manage their retirement savings,” Mr Appleyard said in an email launching the promotion. “This is an end to $20 billion in admin fees within superannuation forever.”
Speaking to SMSF Adviser, Mr Appleyard said that if an SMSF investor’s behaviour is “quite standard”, the fund can be automated with data.
“Because I own the deeds, the deed is entirely automated, there will be inbuilt investment reporting, investment accounting and the data flowing through, you know that it is compliant because the systems are embedded.”
Mr Appleyard added that the administrative costs of SMSF establishment are over-stated and that trustees’ money is better spent on advice.
“The truth of the matter is that I can already give SMSFs away for free – the technology exists and is infinitely scalable,” he said.
“To be very specific, this is made possible by a number of softwares talking together, interacting with each other to enable transactions, correct transactions and administer them and ultimately flow it through,” he said, likening the technology to a mobile device app and describing it as an “iTunes for financial services”.
“We have the technology now, so why are we all being disingenuous and pretending to be necessary administrators of funds and then charging for that?
“What I’m saying is: get the barrier to setting one up out of the way and then, if your mandate is good enough, they will come to you for help anyway.”
When asked whether an SMSF is reasonably something that all Australians – regardless of net worth or financial literacy – can aspire to, Mr Appelyard said the idea of a minimum entry base for SMSFs is increasingly outmoded.
“The idea that you need a certain amount in investible assets or whatever is old thinking – we need to throw that idea out the window – you can have an SMSF with 20 bucks in it if you want,” he said.
“The question of ‘Should someone have one?’ is irrelevant – the point is everyone can have one. We need to change the perception; there’s no good reason why anyone can’t have an SMSF.”
“Just because you give someone more control, what are they going to do that people are so worried about?”
However, Centric Wealth chief executive Phil Kearns issued a statement yesterday expressing concern about just that.
Reflecting on recent figures from the Australian Taxation Office and SMSF Professionals’ Association of Australia (SPAA) research – particularly a SPAA finding that an additional 1.4 million people are considering setting up an SMSF – Mr Kearns warned of long-term detriment to retirees.
“This will mean the number of self-managed retirees will swell to almost 2.5 million,” Mr Kearns said.
“Is it likely that all these people will have the knowledge, experience and time needed to manage their SMSF effectively?
“In my view, this could create a number of problems for the individuals and the government, who may end up financially supporting these people down the track.”
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