European financial literacy specialist Robert Holzmann has suggested SMSF trustees should have a “competency test”, noting that approximately 30 per cent of trustees “only have a trade or diploma qualification”.
“It would seem obvious to point out that anyone running a business, including company directors, trustees of trusts and partners in partnerships, do not require mandated training to do their job,” said SPAA’s chief executive Andrea Slattery.
“Many of them are responsible for unrelated investors’ money and yet there is no requirement they have formal academic qualifications.
“With an SMSF, the trustees are responsible for their own money. Perhaps the simple reason SMSFs have performed on par with the APRA-regulated funds is the simple fact it is their money and they have a greater interest in ensuring it is invested wisely, and therefore more conservatively, to ensure real gains.”
Ms Slattery also noted the previous APRA Trustee Governance Report on the APRA-regulated sector showed approximately 90 per cent of these funds did not require any formal education training to be a trustee, and that 81 per cent did not require any super or investment knowledge to be a trustee.
“Yet APRA fund trustees manage billions of dollars of other people’s savings,” Ms Slattery said.
John… it seems the more education you cram-in the less cognitive and intuitive ability you are able to display. I agree with you wholeheartedly. But we are in danger of being over regulated.
I find Holzman’s conceit incredible. Although I have a Trade & Degree in 75 yrs I have learned that a reasonable knowledge of reading & primary maths, but principally an ability to detect & avoid liars & cheats(once learned by about 15) is sufficient to run ones own Super Fund. (Indeed the latter skill was probably the main reason I shunned Industry & Commercial Funds & those in which Politicians were able to interfere too much).
At last a sensible comment on SMSF’s. There are so many vested interests trying to kill off the SMSF industry. The only reason the “big boys” survive is because they have a huge pool of funds to cover up their mistakes – including sending millions to Hong Kong a few years ago.
It is the law that representatives of the members is on the governing board, yet many of those have no qualifications either.
Maybe we should require all our politicians to take competency tests because each deoartment controls many multiples of the money that most SMSF’s control – and it is not even their money. However, i cannot see that happening at any time in the foreseeable future.