The SMSF sector is leading the superannuation industry regarding transparency standards, while other areas of the industry continue to grapple with the concept, according to an expert in the space.
“As a sector we are actually leading the rest because you’d all agree SMSFs are very transparent whereas the other types of funds are not so transparent,” NowInfinity principal Grant Abbott told delegates at the seventh annual NowInfinity Conference in Hawaii last week.
“With our SMSF clients we know exactly what level of fees they’re paying. They may complain about it sometimes, but at least they know what fees they’re paying.
“In comparison, industry funds might say you pay $70 a year in fees, but then there is an element of this amount plus, plus, plus. It’s like being overseas where you get hit with a lot of hidden taxes and gratuity charges that bump the price up.”
And transparency might not be the only aspect SMSFs take the lead on in the coming years, Abbott said, as the current government seemed to be exploring more effective uses for those types of retirement savings vehicles.
“When we met with Assistant Treasurer Arthur Sinodinos he asked us: ‘What’s this thing about only having four members in the fund? Where did that come from? Surely we’ve got to change that,’” he said.
“He seems to be very open and receptive. Another thing he came up with is why can’t super somehow be used to get rid of the housing affordability problem our children have.
“He’s basically asking us to come to him with ideas and suggestions about how we can improve these things.”
The interaction has led Abbott to believe the next seven years will be a golden age for SMSFs.
“This is because … at least we know this government is going to be in for two terms, and hopefully three, meaning this is our chance to really make it,” he said.
“While we’ve got a government like this it’s important to understand our businesses are really assured.”
