The take-up of six-member SMSFs has remained relatively low and are likely to be used by families in ways the federal government did not envision, according to a superannuation specialist adviser.
HLB Mann Judd Wollongong partner and superannuation specialist Mitchell Markwick said despite six-member funds being available to SMSF trustees since the middle of 2021, clients are not yet adopting them for family use.
“Six-member funds have been a talking point for a few clients interested in creating a family fund or an ongoing estate planning tool, but in practice I don’t see a large take-up of them,” Markwick told selfmanagedsuper.
“I think it’s going to be quite a handy planning tool and can see there are going to be circumstances where it might be taken up, but less so in a family scenario than within a business or where a group of friends want to put together their money so they can buy property.
“I can see a small uptake from that point of view and the benefits, but I definitely can’t see a large take-up in fund numbers.”
He said as a practitioner he still remains concerned about the cross-generational issues that arise from having different members of one family in a fund as promoted by the government when introducing the legislation to create the funds.
“One of my main concerns is there are six individuals with different views and how do you put those together in an investment strategy and get everyone signed off on it,” he said.
“Also, who takes control of the administration of the fund? Having six people involved makes those decisions even more complicated and the problems will come from that side of things because everyone has got to be on the same page.
“So, it’s in these very limited circumstances where I can see it being used.”
Markwick’s view is also shared by BT technical services technical consultant Tim Howard, who recently told selfmanagedsuper the current take-up of six-member SMSFs has been by families looking to acquire and develop capital-intensive property.
