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Industry funds back increased SMSF disclosure
Two industry fund lobby groups have backed ASIC's push to increase the disclosure requirements for advisers delivering advice on SMSFs and argued only the very largest SMSFs can compete with APRA-regulated funds on cost.
In a submission to Consultation Paper 216: Advice on SMSFs: Specific disclosure requirements and SMSF costs, Industry Super Australia (ISA) and the Australian Institute of Superannuation Trustees (AIST) have pointed to the “unacceptably high level of poor advice” being delivered to people considering the establishment of an SMSF.
“ISA and AIST support an enhanced regulatory regime that imposes an obligation on financial planners, accountants and others who 'provide a critical entry point on the establishment of SMSFs' [according to CP216],” said the submission.
The submission also stated only the “very largest” SMSFs would be cheaper than the “most expensive” accumulation industry fund.
The cost-to-earnings ratios for SMSFs with small account balances are “unacceptably high”, according to the submission.
“In addition, far too many SMSFs have what could only be described as a highly undiversified investment portfolio and a consequently high-risk investment strategy with real property investment being a leading factor,” said the submission.
SMSF trustees should also be required to undergo regular education to prove they are a fit and proper person to run the fund.
When an SMSF is registered, each of the trustees should be required to formally acknowledge their duties and responsibilities, as well as the risks involved in running a self-managed fund, according to the submission.
“It is entirely appropriate that such an exercise take place as the cost of failed SMSFs is borne not only by the individual members, but also by the taxpayer who ultimately bears the cost of tax concessions provided to an SMSF and any additional age pension expenditure required in the event that the SMSF delivers sub-optimal results,” the submission concluded.
So here we go again. The vested interests are giving us false propaganda. Those deceivers do not do the maths. A fund with $2 million will cost about 0.15% in my office. I think many other industry or retail funds would only aspire to this and could not compete. Some of my funds have $7 million or more and the cost as a percentage is less than 0.1%
Now we suddenly have failed SMSFs. How many have failed? None that I have known of in many years.
We then have sub optimal results:The industry funds should have a good look at themselves. They are non transparent when it comes to shares, buy a lot of shares that should not be bought and cannot give proper advice regarding asset allocation, pensions, tax savings and capital gains concessions.0- Obviously the comments have been made from a totally biased position and must be read with that in mind. These people do not understand that members of SMSFs are not sheep and like to control their future rather than leave the funds to be managed by Joe Blow on behalf of the common denominmator rather than specifically to each members needs0
- ISA etc are only attempting to protect their self interest - let us see the net returns they have delivered and what SMSF have delivered over the say the last 10 years - I would rather rely on my own investment decisions than the likes of AMP etc0
- And the salaries of these lobbyists come from???? Surely not from the returns 'that only benefit members'?
The day an industry offers full disclosure, maybe they can comment on such things. Stop publishing their endless tirade against everything that doesn't feather their own nests!0 - Asking an industry fund about smsf is like asking a baby to drive a car.
Just dangerous for everyone.0 - Two industry fund lobby groups have backed ASIC's..
And i stopped reading..
Let me guess, just beating up on their own industry again..
Probably just another bunch of union hacks.0
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