ASIC slammed for interfering in minimum balance debate
ASIC has been told to maintain a purely regulatory role and to stay out of debate concerning starting balances for SMSFs.
In comments made to SMSF Adviser, Olivia Long, CEO of XpressSuper and Superguardian, spoke of her “surprise and dismay” upon learning of comments made by ASIC in which the regulatory body stated “the costs of establishing and operating an SMSF with a balance of $200,000 or below are unlikely to be competitive, compared to a fund regulated by APRA”.
Ms Long said she disagrees both with the ASIC statement and the regulator’s decision to make such a comment.
“There is simply no evidence that SMSFs with balances of less than $200,000 are run less efficiently than their wealthy counterparts,” she said.
Ms Long also made particular reference to the 2010 Cooper Review and the 2014 Financial System Inquiry which both looked at setting a minimum balance as a pre-requisite for establishing an SMSF.
“After examining all the evidence, neither of these vigorous inquiries thought there was any merit in the suggestion,” she said.
Despite prior investigation into the matter, “the thrust of this ASIC edict is self-evident: they want to discourage people to set up a SMSF with a starting balance of $200,000 or below”, Ms Long claimed.
“It seems the conclusions of two inquiries is not enough for some people,” she added.
Quick to point out there is a lack of attention and appreciation for those who are taking superannuation fund management into their own hands, Ms Long said “people adopting such a responsible approach to their superannuation should be encouraged”.
The SMSF sector, boasting approximately $600 billion in FUM, has frustrated the retail and industry funds, she said, as they deal with a large migration of members away from their services as they edge toward retirement.
While noting that ASIC has in the past effectively targeted spruikers and advisers who prey on the vulnerable, Ms Long reiterated that the regulator should maintain a strictly regulatory role.
“It is not ASIC’s role to enter the debate about the parameters of which the SMSF sector operates,” she said.