A vast majority of respondents to an SMSF Adviser survey have said there should not be a compensation levy in place for SMSF investors.
In response to the question ‘Should there be a compensation levy in place for SMSF investors?’ 85.3 per cent of the 197 straw poll respondents answered ‘no.’ The remaining 14.7 per cent said there should be a compensation levy in place.
Partner at HLB Mann Judd Michael Hutton told SMSF Adviser he disagrees with the notion of a compensation scheme for SMSF investors, saying trustees are typically aware of their level of responsibility.
“SMSFs are typically set up by people wanting to have control over and flexibility with their superannuation arrangements. These investors are typically more engaged with what is happening with their superannuation and as a result are more aware of what is going on,” Mr Hutton said.
“Trustees are responsible for the investment strategy of their fund and the investment decisions that they make. Most take on this responsibility knowingly and happily.
“To have a compensation scheme and associated levy is, I believe, overregulation.”
However, Paul Sholl, partner at Austin’s Financial Solutions, told SMSF Adviser a “last resort compensation scheme” accessible by SMSF investors has merit but he does not believe this should be funded through a levy on SMSFs.
“A levy for all SMSF investors will disadvantage the majority of trustees who comply with the regulations and make appropriate and sound investment decisions… If a compensation scheme is to be provided, we believe it should be funded by the industry providing the investment,” Mr Sholl said.
“Why should individual investors be required to fund the acts of those they have placed their faith and trust in when investing their money. If the industry is unable to provide adequate protection then why should it be left up to their customers to provide it for them?”
SUBSCRIBE TO THE SMSF ADVISER BULLETIN
- 23 Aug 2017TBAR reporting tipped to expose illegal adviceBy Miranda Brownlee
- 22 Aug 2017Contentious views on segregation locked inBy Katarina Taurian
- 22 Aug 2017Contributions spike for 2016-17 financial yearBy Staff Reporter
- 22 Aug 2017ATO targeting illegal retirement schemesBy Staff Reporter
- 22 Aug 2017Finalists announced for landmark new awards programBy Staff Reporter
- 22 Aug 2017SMSFs cautioned on ECPI trap with excess amountsBy Miranda Brownlee
- view all