In its submission to the Financial Services Inquiry, made public yesterday, the ICAA argued given that the SMSF sector represents a “different model”, it does not require prudential regulation.
“The [ICAA] largely supported the findings of the 2010 Cooper Review into Australia’s superannuation system in which the SMSF segment was identified as largely successful and well functioning,” the ICAA submission stated.
“Any further substantial regulation around the SMSF segment is unwarranted, creating artificial barriers to those wishing to control their own superannuation savings.”
The submission also noted that by 2033, SMSFs are expected to hold $2.23 trillion out of an estimated superannuation pool of $7.6 trillion.
“The unique aspect of the SMSF sector is that the assets are spread over more than half a million different entities,” the submission read.
“Therefore, while it will be important to address the issue of available assets for superannuation investment, it will be equally important to ensure the SMSF sector has the ability to invest in new and different asset classes.
“Their individual size may prove prohibitive for certain investments where the ability to pool resources will potentially enable a new source of funding for investments,” the ICAA said.
The ICAA submission also recommended that the inquiry look into infrastructure bonds in order to give SMSFs access to the asset class.