The SMSF Association has highlighted the publication of lower, revised costs for running an SMSF in the Productivity Commission’s final report and the recommendation that SMSF advisers should have specialist education as key wins for the industry body.
Association chair Professor Deborah Ralston told attendees at the SMSF Association National Conference 2019 there had been a number of positive outcomes as a result of advocacy work by the body, including several improvements to Financial Adviser Standards and Ethics Authority standards and technical changes to tax laws for SMSFs.
Ralston, however, focused on the change in SMSF costs quoted by the Productivity Commission in its draft and final reports, stating the reduction in figures between the former and latter highlighted the problems with inadequate data in the SMSF sector.
“This conclusion drew attention to the paucity of accurate cross-sectoral superannuation data and the resultant difficulties in making comparisons between SMSFs and APRA (Australian Prudential Regulation Authority)-regulated funds,” she said.
“With assistance from our platform provider partners, the association was able to successfully argue that the data and methodology used by the commission to make these comparisons were flawed.”
She said the input from the association and its partners was reflected in the commission’s final report, published in January, “which showed that it listened to us and other SMSF experts and revised their cost-effective figure for SMSFs to $500,000”.
“Although we believe better data could see this figure fall lower, it’s a vast improvement on where the commission started from and makes it imperative that the industry has access to improved data to ensure more informed decision-making,” she noted.
She said while ASIC Report 575 raised serious issues about SMSF advice, “the silver lining in the report is the recommendation that SMSF advisers should complete specific education”.
This was also a recommendation from the Productivity Commission and reflected a long-held position of the association, she noted.
Work around opposing the removal of franking credits would continue, she said, adding the Labor proposal directly impacted on SMSFs and self-funded retirees.
“What is striking about the policy is the inequitable impact on SMSFs compared with other super funds. The association has been working hard to highlight the unfairness of policy and to this end formed the Alliance for a Fairer Retirement System, which has brought together nine national superannuation, retirement and investor bodies to oppose the policy,” she said.