BT plays down FSI speculation about SMSFs
While the Financial System Inquiry (FSI) panel seeks feedback on a prohibition on borrowing in super, BT Financial Group’s Bryan Ashenden has reminded the SMSF sector that the panel has made “no recommendations at all”.
In the FSI’s interim report, handed down last Tuesday, the panel has sought feedback on restoring the general prohibition on direct leverage in superannuation on a prospective basis.
Speaking at CPA Australia’s SMSF conference last week, Mr Ashenden, BT’s senior manager, technical consulting, said the first thing to remember about the FSI report is that it is an “interim report”.
“All they are doing at the moment is talking about the things that we think further consultation should occur on,” he said.
Mr Ashenden said the report highlighted statistics that indicate why there should be further discussion of banning gearing inside superannuation.
“They highlight that any time you look to leverage, you increase potential risk, so what if [there’s a] potential market crash… in this case, what could it mean for people’s retirement?” he said.
Mr Ashenden also noted that over the 12 months to April of this year, the number of SMSFs using a geared investment product rose 11 per cent, an increase to 38,000 funds.