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Shifting trust paradigm drives engagement

The misconceptions surrounding the SMSF sector since inception have been gradually dismantled as the industry continues to mature and find its voice via greater collaboration between the government and regulators, as well as increasing levels of engagement among fund members.

That is the view of SMSF Association chief executive Andrea Slattery.

Speaking at a thought leadership breakfast at the SMSF Association 2017 National Conference in Melbourne today, Slattery said that in the 14 years since she began her journey with the body, there was a noticeable shift in the trust paradigm surrounding the sector, with SMSFs initially misconstrued as a vehicle “for the wealthy and for tax opportunities”.

“One of the journeys that the system of SMSFs has had over that time was that it’s actually gained a level of trust that has been become quite strong from [the perspective of] the government and the regulators,” she said.

“[Initially] there was a level of total distrust and misunderstanding; it was [seen as] a ‘cottage industry’ from a system-wide perspective back then.”

Greater levels of fund member interest and activity helped prompt the SMSF industry’s transformation, with the sector growing from $109 billion in 2002 to $650 billion today and the collective number of funds now totalling 570,000, she added.

She also noted the spate of industry-wide reviews – including the 2009 Jeremy Cooper-led Superannuation System Review and the 2014 Financial System Inquiry – found the SMSF sector was well managed, well functioning and well run.

However, she conceded there was a lot of work remaining to be done to help the sector continue to flourish and build engagement among its members.

“[Trustees] have gained a level of trust in the system because they are in control and have found people to provide them with advice,” she noted.

“The industry has grown so much and is now recognised as the third best in the world from a systems perspective, so our pillars, our different groups of super, have changed significantly and are working more intricately together.”

The multi-disciplinary nature of face-to-face advice interactions meant that for the industry to continue to grow, advisers must take a more active role in shaping the trust paradigm and empowering the customers of the future, she said.

“Nothing is perfect and we’ve still got a long way to go, but that level of trust in the system has changed significantly over the last 14 years,” she said.

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