The findings from the Australian Securities and Investments Commission’s (ASIC) “Report 575: SMSFs: Improving the quality of advice and member experiences” indicate education activities for trustees should be an important part of advice propositions in the coming year, according to a specialist business consultant.
“Unfortunately with the research into members’ experience that ASIC did it’s quite obvious that unfortunately our trustees need a lot more education around the SMSF space,” SMSF Design founder Tracey Besters told attendees at the recent SMSF Association Sydney Local Community Christmas Lunch.
“As an industry and as a professional, I think that’s one of our key focus areas in terms of how we educate our trustees in a more in-depth way.”
Some of the findings of the corporate regulator’s study Besters referred to indicating the need for greater trustee education included the fact 33 per cent of SMSF members did not know a fund had to have an investment strategy, 30 per cent of members had no arrangement in place for their SMSF if something happened to them, 29 per cent of members thought they were entitled to compensation if the SMSF suffered from an event of fraud or theft, and 19 per cent of members did not consider their insurance needs upon establishment of the SMSF.
“So we need to educate and we need to do more from an education perspective,” she said.
She pointed out many of the member experiences ASIC uncovered indicated SMSFs were being set up with too much haste and that advisers needed to correct this situation.
“I think as an industry we now need to pull back a little bit, slow down a bit, educate our clients to make sure they are aware of all of the idiosyncrasies and complexity within the industry and within their SMSF,” she said.
“It seems to be something ASIC is really focusing on.”