SMSFs have a challenging road ahead of them in navigating the transition to SuperStream, exacerbated by the fact many do not seek professional advice, according to wealthdigital.
Wealthdigital technical manager Rob Lavery quoted an Australian Securities and Investments Commission (ASIC) report that looked at the sources of advice used by SMSF members when establishing their fund.
“ASIC’s report identified that 78 per cent of new members and only 57 per cent of existing members used a financial planner or accountant when establishing their fund. The remainder relied on a range of sources, from family members and colleagues, to real estate agents, to no one,” Lavery said today.
“In the best-case scenario, the trustees of over 100,000 SMSFs in Australia are receiving no active support regarding how to run the fund and the true numbers are probably higher.
“How will these funds navigate their SuperStream obligations when they have no one advising them who is obliged to stay up to date with the rules governing SMSFs?”
Treasury consulted on draft regulations in July that would apply the SuperStream data standards to SMSFs more extensively from the end of November 2019.
The regulations would require SMSFs to provide a range of information to the ATO, including a unique superannuation identifier, like an Australian business number, bank details for electronic payment and an internet protocol or other digital address.
“This information would allow a freer transfer of data and monies between SMSFs, as well as between SMSFs and APRA (Australian Prudential Regulation Authority)-regulated funds. It would facilitate easier consolidation of super accounts for SMSF members,” Lavery said.
“This freer transfer of information and funds will come with a greater administrative burden. One that many funds may not be prepared to absorb.”
However, he said there was some hope, with the ATO likely to assist SMSF trustees in adjusting to their SuperStream obligations, adding a period of limited enforcement is a possibility. The annual audit is also an avenue to spot mistakes as they occur.
“That said, those trustees currently operating without support would be wise to proactively seek advice to assist in the process. Whether this comes from a planner, accountant or administration service, it would be money well spent.”
