The SMSF Association has expressed its concerns over the increasing number of disqualified trustees and has called on the sector as a whole for greater proactivity to eliminate behaviour, such as illegal early access of benefits, to arrest this trend.
“We’ve seen a significant increase in the number of individuals being disqualified as SMSF trustees over the last few years. I think we’ve gone from 252 in the 2021/22 financial year up to 750-odd [in the 2023 income year and] I think we’re on track to break another record this financial year,” SMSF Association chief executive Peter Burgess told delegates while participating in a thought leadership breakfast panel discussion that opened the industry body’s National Conference 2024 in Brisbane today.
“So clearly the ATO is ramping up its compliance function and I think that’s something we have to get on top of.
“Included in that are a lot of people who are accessing their funds illegally.
“So I think it’s important we get on top of it and that we take some joint responsibility for weeding out those individuals who shouldn’t have that [type of] access.”
According to Burgess, the sector risks having adverse regulatory intervention if it does not do more to address this issue.
Fellow panellist Heffron managing director Meg Heffron identified a further area in which the sector could improve that would lead to better trustee outcomes.
“We have been a bit lazy historically [when discussing the difference between Australian Prudential Regulation Authority (APRA)-regulated funds and SMSFs] and just talked about differences in investments. [We’ve said] the great thing about SMSFs is flexibility of investments, flexibility and control, and I look at my client base and I’m hard-pressed to find a large number of people doing things they couldn’t do in an APRA fund if they worked hard enough to find the right APRA fund,” Heffron noted.
“So there’s something about flexibility and control that goes beyond investments that I think they’re still looking to an SMSF for and I don’t think we communicate that well enough.”
