Plenty Plus co-founder Greg Einfeld says many accountants were “advising their clients to set up SMSFs where they perhaps wouldn’t have met ASIC’s criteria and expectations”.
Mr Einfeld told SMSF Adviser this is demonstrated by the fact that 30 per cent of the advice requests for SMSF establishments by accountants for their clients on the Plenty Plus system are rejected.
Plenty Plus co-founder Josh Golombick said the advice is usually rejected because the fund balance falls below the $200,000 minimum balance recommended by ASIC.
The system may also advise against an individual setting up a SMSF if they do not have enough time to dedicate to managing the fund or they don’t have enough investment knowledge.
One of the implications of this, is that there’ll be fewer SMSFs established in the future, Mr Einfeld said.
“There are a whole lot of SMSFs that have been established by accountants up till now, where the members have say $150,000, they don’t have any investment experience or they don’t have the time to put into being a trustee,” he said.
“Over time, the bar will get raised and those types of cases won’t result in SMSF establishments going forward. So I have no doubt that the number or SMSF establishments over time will come down just for that reason.”