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Industry poised for royal commission scrutiny

The SMSF Association has said while SMSFs have been explicitly excluded from the terms of reference of the banking royal commission, there remains the potential for the sector to be included in the work of the inquiry.

At the SMSF Association National Conference 2018 in Sydney today, association chair Andrew Gale used his opening address to highlight three key avenues through which SMSFs might be dragged into the investigation.

“History tells us that royal commissions can go in unexpected directions,” Gale said.

“The advice and conduct issues of Australian financial services licensees are included specifically in the terms of reference and this could include SMSF advice and recommendations to establish an SMSF.

“Secondly, with large super funds included in the terms of reference and under scrutiny, we expect the large fund sector – especially industry funds – to seek to deflect attention by pointing out issues with SMSFs.

“Issues raised could include minimum reasonable account balance sizes for SMSFs and limited recourse borrowing arrangements.”

Finally, there was a small possibility the royal commission’s terms of reference could be expanded to include SMSFs or related fields, he said.

“On a positive note, it’s worth noting that prior inquiries into superannuation have found the SMSF sector to be functioning well with a high level of compliance,” he said.

“As leaders of the SMSF sector, we believe we can offer insights on some key issues from the perspective of an industry that has grown to represent more than $700 billion in assets and over 1.1 million SMSF members.”

Gale will be succeeded by distinguished academic and super and public policy expert Deborah Ralston at the end of the conference.

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