In large part, the SMSF Professionals’ Association of Australia (SPAA) has concurred with the overall thrust of these warnings while taking issue on some specific points. But if these warnings help trustees achieve a better understanding of what’s involved in running their SMSF then so much the better.
But warnings can only go so far. There can be no definitive answer as to how many trustees read or hear about these warnings or absorb the messages.
Which is why, from SPAA’s perspective, the most important factor to ensure trustees fully understand all their responsibilities is to give them access to the best professional advice, whether that be legal, actuarial, auditing, accounting or financial planning. There’s simply no substitute for advice that’s underpinned by a sound educational process.
It’s for this reason that SPAA took issue with the previous government’s decision to cap tax deductions for self-education at $2,000. And why we applaud the decision by the current government to reverse this decision.
The previous government’s mantra, and, from our perspective, nothing has changed with the 7 September election, is that it’s imperative – especially in the FOFA era – to improve professionalism across the financial services sector.
Remember, too, that many of the reforms in financial services are linked to the licensing of professionals with the requirement they belong to a professional association and, typically, these associations rightly require members to meet certain education standards.
Meeting these requirements comes at a cost to individuals. So it always seemed to SPAA that the previous government’s positive encouragement of higher professional standards was at odds with its proposal to erect a financial barrier to education through reducing the tax deductibility of self-education.
When the proposal was first announced, we did some sums at SPAA and, based on a conservative estimate of what our members spend to improve their skills, came to a figure of more than $6,000 a year.
This money is not spent aimlessly; members just understand the importance of remaining at the top of their game for their clients and, as such, the need to attend conferences and participate in courses and webinars.
They realise that gaining a qualification doesn’t end the education process; a changing world (and we all know how much superannuation has changed in recent years) means they have to continually improve their skills.
The SMSF sector now has about one million SMSF members and about $500 billion in assets under management; it’s little wonder the [regulators] are like cats on a hot tin roof, continually voicing their concerns about the SMSF sector.
Well, one way to help alleviate those concerns is to give trustees access to the best professional advice, and the only way to do this is encourage advisers to never stop learning.
Jordan George is SPAA's senior manager for technical and policy.