The Self-managed Independent Superannuation Funds Association (SISFA) has warned there is a real danger the new super laws will drive people away from the superannuation environment.
SISFA managing director Mike Goodall said the biggest challenge now was retaining SMSFs in the system.
“I don’t think anyone is against what the government is doing; it’s how the government is doing it that is the problem people have because at the end of the day we want to make it work, so you don’t want to drive people away from superannuation,” Goodall told selfmanagedsuper.
“If you take the people who are in SMSFs, they do it for control, whether they’re good or not at managing the SMSF is irrelevant, it’s just all about having control.
“The argument is that superannuation is still the best tax advantage vehicle for retirement you can get, but people get frustrated when the system gets fiddled with all the time when we’re trying to make decisions for the long haul, but then you find the government is just going to change it all – they don’t do that with property or shares, so there’s more certainty around those investments.
“If super gets played around with too much, people will begin to think that it’s just not as good as it used to be, and the fact that there’s so much information out there about what you can do with your money outside of super, I think is evidence of that.”
Goodall also remarked on what he thought would happen to the cost of advice under the new super measures.
“The cost of advice is becoming a little prohibitive and therefore advisers aren’t able to service that 75 per cent of people who won’t pay the money or think it’s too expensive,” he noted.
“So there’s got to be a solution for that and automated limited advice has got to be one of their options. It’s just a matter of how that plays out.”
His comments come ahead of the 8th Annual SISFA SMSF Forum on 18 November in Melbourne, where the new superannuation measures will be a key discussion point.
McPherson Super Consulting director Stuart Forsyth was in agreement and said the cost of advice would increase for SMSFs because they would require more specialised advice, which could come at a higher cost.
“Ultimately, there will be more need for advice, particularly in this interim transition period, and then also an ongoing need for more reporting – so SMSF administrators and other fund systems will become a bit more complicated,” Forsyth said.
“That’s the business we’re in – complying with the rules that the government puts in place, so it does tend to increase costs.
“It will increase costs for the ATO as well. I don’t think there’s any avoiding that.
“It’s a complicated regime.”
The former ATO superannuation assistant deputy commissioner will also be presenting at the SISFA SMSF Forum. More information can be found here.
