SPAA's Andrea Slattery speaks to Katarina Taurian about the areas of the superannuation system that are in most need of the Financial System Inquiry's attention.
How do you think SMSFs will fare in the FSI and do you have any concerns about what the outcomes will be?
We believe that the SMSF sector is well functioning, it’s efficient and it’s allowing a large number of Australians to meet their retirement income goals.
The SMSF system is actually showing you our current retirement income system is actually meeting all of the objectives and it’s allowing people to be self-sufficient in their retirement and it’s actually performing well. The efficiencies are being gained by competition and new technology, and the fees are significantly lower than they were 10 years ago, generally.
The system is actually providing genuine choice and it’s providing genuine competition in the market. We believe that the system is actually not broken either, and the SMSF sector is a sector that actually shows that it’s not broken, and that all we need is some tweaking and some interest in building more consumer confidence across the board.
I believe that the SMSF sector, if the facts and the research is looked at, will show it’s one of the leading sectors and therefore it will be viewed in that format by the FSI.
What areas do you think are in most urgent need of attention with the FSI?
I think probably the policy stability issue. The FSI really needs to recommit now to the objective of superannuation being the primary retirement income vehicle and that will underline the policy settings which can encourage consumer confidence and trust in the system.
We believe that there should be some kind of long-term view of superannuation, a more appropriate measurement of superannuation tax concessions. We believe that the cycle of reviewing the superannuation tax concessions should be popped into the Intergenerational Report, which is at least a five-year cycle, rather than the annual Budget cycle.
The topic of fees in relation to the SMSF sector is continually resurfacing, why do you think that is and is there any cause for concern at all?
None. What we’ve got to do is look at the sector and look at the facts and the qualified research about the sector and not be frightened of it.
The valid research shows there is no issue with the minimum balance, and there’s also no issue in relation to the area of fees because they are becoming more and more efficient and they are meeting the objectives sensibly of people moving into retirement as well.
The ATO stats for the June quarter were released recently, was there anything of note or concern for SPAA?
Not at all.
It’s just reconfirming again that the sector’s quite well diversified and once again it’s showing that the sector is actually efficient in the way in which it’s functioning and it’s providing, as the FSI confirmed, a diverse opportunity for the whole super system.
Andrea Slattery is the chief executive officer of the SMSF Professionals' Association of Australia.
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