Super reforms increasing risk of elder abuse
With many older SMSF trustees requiring assistance in understanding the superannuation changes and restructuring their fund, some may fall prey to financial predators, warns an elder abuse specialist.
Protecting Seniors Wealth chief executive Anne McGowan said SMSFs have always been a target for elder abuse by unscrupulous family members or professionals due to the large balances sitting in some SMSFs and the fact that it’s a growing pool of money.
The introduction of the transfer balance cap and total superannuation balance, however, may further increase the risk of elder abuse for older trustees, she said, because they’re likely to have more of their money sitting outside of the superannuation environment.
“With the new laws coming in SMSF members can only keep a certain amount of money in pension phase, and then the rest will have to be relocated to other investments. So that in itself will also leave them open to financial abuse, because it may be easier for financial predators to access those other funds,” she warned.
“With our ageing senior population, we'll have more and more people moving into a [situation] where they're going to need more assistance, and more people to be aware and look out for them.”
Elder abuse can also occur she said where the member appoints a family member who turns out to be a financial predator as a trustee in their SMSF.
“SMSF advisers certainly need to be very aware of the many different ways that financial abuse occurs and to be on the lookout for it,” she said.
“As people age and become older, they do become reliant on people to assist them, and those people who are genuinely assisting older people should be commended, and there are so many people that do, but there is a growing number of people with ‘inheritance impatience’ and they're most often the family members.”
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.