Despite being one of the largest financial sectors in Australia, superannuation, and SMSFs specifically, is becoming increasingly commoditised, said managing principal at Rockwell Olivier, Peter Bobbin.
“What we need to do… is think about the future of super. Right now, my opinion is it has been commoditised far too much and it’s time to embrace, manage and deal with super properly,” Mr Bobbin said, speaking at the Institute of Chartered Accountants Australia (ICAA) National SMSF conference in Melbourne this week.
Because of this increased commoditisation, Mr Bobbin said, “far too many” trustees are establishing SMSFs when they are not suited to a self-managed environment.
Consequently, the issue of control of an SMSF has not been adequately addressed, including control upon the death of a member and while the fund is still in operation.
“We have court case after court case where the sole issue is about who has control… You need to build that into an SMSF environment. My experience is that people are not thinking about these very issues on set up, because it’s so commoditised,” Mr Bobbin said.
“If you’re a professional involved in helping someone set up their superannuation… and you don’t help them make sure [their super] matches what their [estate planning] objectives are, and as a consequence the beneficiaries miss out, then you might be sued,” he added.
Mr Bobbin said superannuation in Australia is currently experiencing high growth in litigation.
“Lawyers [are] coaching or pitching for business; [super] is the greatest litigation growth area today,” he said.
While I agree that superannuation can be a litigation growth area, so too can estates generally as disreputable baby boomers drop off the perch ungraciously leaving behind un-blended warring ex-spouses, families, boyfriends and girlfriends. But that is no reason why people should not use SMSFs. The real point, as Peter Bobbin is emphasizing, is that people should see superannuation as an exercise, just like a will, where you get your lawyer involved – indeed superannuation and spousal wills MUST be integrated. Personal advice is essential.
Dr Terry Dwyer
Dwyer Lawyers
http://www.dwyerlawyers.com.au
All licenced financial planners are bound by law under the Corporaions Act to “Know their clients” and more recently “Best Interest”. In order for this to be observed, plannres are oblgated to receive full disclosure from their clients,including estate planning. Perhaps if all SMSF advocates were bound by the same law, there would not be the amount of litigation happening in this area.