WealthWithin investment analyst Janice Cox told SMSF Adviser that SMSF practitioners should be more concerned about the financial literacy of trustees than about recent talk of changes to FOFA.
“If you asked me what the [FOFA changes’] impact is on the general population, I would have concerns, but not with the SMSF space,” she said.
“In terms of the SMSF space, I think a lot more could be done in lifting the level of education standard that SMSF trustees are required to possess.
“I don’t think it should just be up to them to do it themselves; I think there should be some sort of control in the area about the minimum standards that are set.”
Wealth Within chief analyst Dale Gilham previously told SMSF Adviser education for prospective SMSF trustees should be compulsory, to ensure suitability of the fund for their circumstances.
“When you [see] at least half of the investments in SMSFs on average are in shares, that says to me that people need to be educated,” he said.
“Now that property has become bigger in terms of buying for SMSFs, [education] has become more critical, because that’s a huge mistake if you get that wrong.”
Part 2
Before borrowing in SMSF was allowed unless you had the full purchase price in the fund you were not able to buy property. So a lot of more experienced SMSF investors – read long time SMSF holders have their property portfolios outside of super and their share portfolios inside of super. Try and tell them they need to get education. When will this education nonsense end, as to push this education barrow to its natural conclusion ever superfund member should receive education about what investment they are in.
So you need education to run a SMSF as Dale Gilham says that “when he sees half of the investments in SMSF on average in shares that says to me that people need to be educated.”
So when I invest in a public offer or industry fund and I take the share fund option, which has more than 50% in shares, does that mean I also require education to invest in that option. My oh my we are getting more and more self-interest appearing every day. If a person has a number of property investments outside of super they may want their super to contain all shares to diversify their total investment portfolio. Part 1
I disagree, and how to you propose to measure education? what is the criteria and will this apply to all members or just one? SMSFs are about control, members are transferring from industry and retail funds as those so called ‘wiz’ investment managers are just producing returns, hence the shift to SMSF
‘Trustees should be required to have a minimum level of education to operate an SMSF’
Great. To look after your own assets that happen to be held in a special style of trust.
To follow this idea further,why not a licence to for all asset types a person buys eg the family home (‘the largest asset pruchased for most’) or what about the holiday home or the family car?
What training does is a director/trustee of an industry fund required to have when they look after other people’s millions?
No wonder Retail & Industry funds can claim to run their operations cheaper than SMSF’s trustees.