Powered by MOMENTUM MEDIA
subscribe to our newsletter
SMSF trustees ‘ships without rudders’, analyst claims

SMSF trustees ‘ships without rudders’, analyst claims

Miranda Brownlee
24 March 2015 — 1 minute read

One financial services analyst has suggested practitioners should be aware a majority of SMSF trustees lack the skills and knowledge required to make appropriate investment decisions and are vulnerable to misinformation.

Speaking to SMSF Adviser, Wealth Within chief analyst Dale Gillham said while there tends to be plenty of information available on meeting the compliance requirements of running an SMSF, trustees' investment knowledge “isn’t anywhere as high as it should be”.

“Whilst I don’t necessarily think education should be mandatory, I think there needs to be checks and balances undertaken by accountants and advisers that ensure a trustee is qualified to run an SMSF,” said Mr Gillham.

“Every SMSF has an accountant or an auditor so perhaps they should be the ones to suggest the trustee receive training if they feel the trustee doesn’t have the skills they need.”

Mr Gillham said that in more than 20 years working as an analyst, he has seen a vast majority of investors consistently make mistakes due to a lack of knowledge, which inevitably impacts upon their returns.

“This is currently happening in the super fund world; people are setting up portfolios and doing things that shouldn’t [be done] simply because they have a lack of knowledge,” he said.

“They tend of be like ships without rudders doing whatever others tell them to do rather than making their own informed decisions.”

This lack of knowledge, he said, is also leaving trustees exposed to some of the more unscrupulous people who target SMSFs for their own benefit.

“The average Australian doesn’t do a lot of research. They don’t read PDSs, and only look at the return rather than the risk on that return, they don’t research different products or providers, and they are at that much greater risk because of it,” he said.

“Getting people to understand what they’re investing in has been a big challenge in the financial services industry – people put their money in places they don’t understand all the time.”

SMSF trustees ‘ships without rudders’, analyst claims
smsfadviser logo
join the discussion

Do you think the government should reinstate the accountants’ exemption for SMSF advice?

SUBSCRIBE TO THE
SMSF ADVISER BULLETIN

Get the latest news and opinions delivered to your inbox each morning

In this month's issue:

  • Time wrap
  • The tech bull run
  • From hobby to passion
  • Golden Years
  • An untimely reminder
  • Why change is so difficult
  • Key Strategies for equalising super