A partner with international law firm Gadens has said SMSF trustees should be subject to compulsory advice or education before they “jump right in” to the SMSF space.
Gadens partner Kathleen Conroy told SMSF Adviser a significant issue in the SMSF sector is trustees’ lack of knowledge about SMSFs.
“I would say 90 per cent of the clients that I speak to about SMSFs do not understand it, they don’t understand the basic concept and certainly don’t appreciate their obligations as trustees,” she said.
“So, one of my big things is that there should be compulsory advice or education for trustees; it will make them stop and think before they jump right in.”
According to Ms Conroy, people are stepping in as trustees when they have no idea of their responsibilities.
“They don’t know the law. It is not that people are setting out to be criminals; they just don’t realise they are not complying,” she said.
Ms Conroy added that the regulations surrounding SMSFs are not problematic, but trustees’ lack of appreciation for their obligations while holding an SMSF is.
“In my mind, the [SMSF] legislation is quite strict and very comprehensive and it is worth asking the question… is it regulation that you should be concerned about or compliance?” she said.
“I am not saying [the legislation] is perfect by any means and there are certain things that could be looked at, but as a whole, the legislation is there,” she added.
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