The SMSF Association has welcomed proposed changes to protect consumers in the superannuation sector, noting the government will not introduce measures the professional body has described as targeting the structure of funds.
The changes, announced today by Assistant Treasurer and Financial Services Minister Daniel Mulino, will allow the ATO to prevent rollovers if it believes they may cause consumer harm, require trustees to undergo mandatory education and funds to hold uniquely identifiable bank accounts, and to disclose at the time of establishment an investment strategy and any advice fees paid.
The association stated while some of the reforms reflect best practice, there would be practical challenges in how they were implemented and those processed would have to be mapped out with stakeholders prior to legislation being drawn up.
SMSF Association chief executive Peter Burgess said: “While we understand the rationale for introducing mandatory SMSF trustee education for prospective trustees, we welcome the acknowledgement of the work the association is already undertaking in this area to support confident, informed SMSF trustees.
“We encourage the government to keep an open mind about how best to uplift trustee competencies, including leveraging the work already being done across the sector.”
Burgess also noted the government had taken on board feedback about measures that added friction to an SMSF set-up or imposed further costs on the sector.
“We are also pleased the government has listened to our concerns and will not be proceeding with cooling-off periods for rollovers to SMSFs, advice fee caps or an opt-in/opt-out Compensation Scheme of Last Resort (CSLR) special levy model for SMSFs.
“These were all options that were previously on the table in the lead-up to today’s final package of reforms.”
He added the association was aware of the need for the cost of compensation to be spread across the financial services sector, which will take place under a waterfall model, but reiterated the government should also be involved as it was the key driver in creating the CSLR.
“We do not believe it is fair that victims, including SMSF trustees, still have not received their compensation payments because the regulatory and CSLR funding model has failed them,” he said.
“As a stakeholder in the sector, we see the need to step up in the short term and we would implore the government in the spirit of ‘everybody’ to do the same.
“ASIC has secured a record $830 million in civil penalties and we believe reform should be considered to redirect a portion of these funds back to the CSLR, just as reform will be introduced to levy the SMSF sector if a special CSLR levy is required in the future.”
Jason Spits
SENIOR JOURNALIST
Jason is a senior journalist with Benchmark Media and writes for the selfmanagedsuper website and magazine and smstrusteenews website. He has covered financial services since 1999 and has written about life insurance, superannuation, investment management and financial advice, in both a freelance and in-house capacity, and also did a brief stint as a media manager for an industry association. He has been the editor of trade titles Money Management and Financial Standard, and was most recently senior journalist with life insurance title Riskinfo.
Articles by Jason