The prevalence of SMSFs among the complaints registered with the Australian Financial Complaints Authority (AFCA) should not be regarded as a problem with the structure of those funds, but with the advice related to them, the SMSF Association has stated.
Association chief executive Peter Burgess noted a recent report from AFCA where it revealed a 95 per cent increase in SMSF complaints received in 2024/25, representing one-third of all investment and advice complaints.
“It’s very easy to point the finger at the SMSF sector here, but we know the root cause here is the conflicted advice models and inappropriate advice,” Burgess said at the professional body’s Technical Summit 2025 in Sydney today.
“The SMSF sector can’t solve those problems on their own. This is a system-wide issue that requires a system-wide response,” he added, noting the association agreed with ACFA deputy chief ombudsman June Smith’s view on the need for the advice sector to address poor superannuation advice.
Smith recently stated in a national newspaper, in response to the collapse of the First Guardian Master Fund and Shield Master Fund, that the advice sector was “beyond black swan events and bad apples and we need to look at these systemic issues across the industry and prevent them from happening in the first place – it’s not enough to have a CSLR (Compensation Scheme of Last Resort) at the end when the harm has occurred”.
Burgess said: “We would agree with that. We need to focus on making sure we have a well-resourced regulator taking action against inappropriate advice and advice failures well before they become a social media issue.”
He also welcomed the announcement by Assistant Treasurer Daniel Mulino of consultation with the advice sector on options for implementing the special levy to deal with the excess costs of the CSLR.
“The association acknowledges the importance of such a scheme, but to reduce the burden on any one individual sector, we encourage Treasury and the Minister to explore ways of spreading the costs as widely as possible,” he said.
“We’ve seen the consultation paper and they have listed a number of different options for which they’re looking for feedback, but there’s no suggestion the government will pay for this. They’re still looking for the industry to pay, but they’re looking at different ways in which they want to apply the special debt.”
