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‘Gaps’ in protection for SMSFs, ASFA warns

By James Mitchell
13 February 2014 — 1 minute read

The Association of Superannuation Funds of Australia (ASFA) has said there are gaps in the consumer protection framework for SMSFs and that trustees should be wary.

SMSF Adviser requested comment on the issue from ASFA amid the collapse of Charterhill Group, first reported by SMSF Adviser in January.

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O’Loughlin’s Lawyers, representing at least 15 Charterhill clients, told SMSF Adviser that many of these clients are ‘mum and dad’ investors.

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“The average creditor that we are seeing is between $80,000 to $120,000,” O’Loughlin’s Lawyers partner Kym Ryder said.

While the association could not comment specifically on Charterhill, ASFA chief executive Pauline Vamos said investors “must be wary”.

“There are some gaps in the consumer protection framework for SMSFs and investors must be wary as a result,” Ms Vamos said.

“The law assumes that SMSF trustees are sophisticated and knowledgeable investors and as such, are able to look after themselves,” she said.

ASFA’s Ms Vamos said that when looking at any investment, including property, it is wise to get advice from a licenced financial adviser.

“That way, there is some protection for trustees of SMSFs in the form of oversight of the licensee by ASIC, as well as access to the Financial Services Ombudsman,” she said.

‘Gaps’ in protection for SMSFs, ASFA warns
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