In response to the question ‘Is the SMSF sector at risk of becoming over regulated?’ 87.9 per cent of the 157 respondents answered ‘yes’. The remaining 12.1 per cent answered ‘no’.
The Institute of Public Accountants’ executive general manager Vicki Stylianou said there has been over-regulation in the SMSF space this year, with some “arbitrary lines drawn” particularly in relation to auditor registration.
“The regulatory [pendulum] has gone too much towards over regulating the profession rather than trying to strike a decent balance,” Ms Stylianou said.
“There’s probably been too much regulation on the profession and maybe not enough emphasis on educating consumers. I don’t think that we do enough in the space around financial literacy of consumers.”
Ms Stylianou added limited licensing requirements are creating “a lot of angst and a lot of pressure” on accountants, and said parts of the application process are lengthy and unnecessary.
With the continued growth of the SMSF sector, Ms Stylianou predicts greater attention from the corporate regulator in 2014.
“I think we’re definitely going to see more attention from ASIC,” she said. “The systemic risks are just too great if something goes wrong.”
As an economist as well as a lawyer, I can see there is a good, dishonest, reason for more SMSF regulation. The costs of complying with regulation wipe out competition from smaller players. That is why APRA, the banks and insurers strangled credit unions and friendly societies to ensure a nice manageable cartel for themselves.
Dr Terry Dwyer
Dwyer Lawyers
http://www.dwyerlawyers.com.au
This fear of over regulation of the SMSF space may soon become even harder. ASIC currently has a consultation paper out on further disclosure requirements to provide to clients looking at setting up SMSFs and in particular targetting “warnings” to scare off mums and dads and add even more documents for them to read and sign.