The head of a research consultancy firm has dismissed concerns over the potential adverse outcomes or risks to the sustainability of the SMSF sector stemming from having funds established inappropriately.
Participating as a panel member during the BT Financial Group Thought Leadership Breakfast at last week’s SMSF Association National Conference 2019, Rice Warner chief executive Michael Rice said: “The evidence is the majority of people in SMSFs have invested well and many of them are now self-directed, self-funded retirees so [having the wrong people establish these funds] is not a threat.
“We’d be concerned if people went in for the wrong reasons, lost their money, fell back on the age pension, but there is no evidence that that’s happening to a large extent.”
Rather than dwelling on negative factors evidence has shown do not exist in the main, Rice said the SMSF sector had to instead be viewed as a positive thing.
“This sector is actually positive. It’s keeping people off government welfare in retirement,” he said at the conference in Melbourne.
In a similar vein, he said apprehensive attitudes over the inclusion of children in an SMSF were potentially unfounded, particularly when assessed from an overall family wealth perspective.
“[With regard to] family wealth, an SMSF is just part of that, you’ve got your home and perhaps your business, and if you want to control it all, it is a good vehicle and putting the children in it makes sense.”
Fellow panellist Australian Institute of Superannuation Trustees chief executive Eva Scheerlinck raised concerns that the inclusion of family members in an SMSF could lead to more frequent incidences of elder abuse, but Rice refuted this theory and its stifling connotations as well.
“I think elder abuse will happen anyway and we shouldn’t stop changing good ideas just because of things on the periphery,” he responded.