Opinions

ASMA

What about SMSF members’ views?

Simon Makeham

Australian SMSF Members Association (ASMA) members are asking why it is there are so many professional bodies and associations out there lobbying and claiming to represent the interests of SMSF members, without any of them actually asking SMSF members for their opinion.

Remember, there is a difference between actually asking an SMSF member and a sample of the almost 1 million SMSF members. Our members feel most bodies representing professional advisers in the industry tend to express their individual opinions about superannuation matters and these opinions are more often than not different to the opinions of, and in some cases detrimentally affect, actual SMSF members.

In saying this, our members recognise all of the organisations representing SMSF practitioners do a wonderful job dealing with a wide range of SMSF technical issues. However, at times it seems they take little or no notice of the actual SMSF member. In fact, it seems at times some of their statements may not even have the widespread support of their own constituency.

According to Australian Taxation Office (ATO) statistics, there were 963,852 individual SMSF members out there in 2013 who were generally engaged with their superannuation and very capable of providing informed and sensible comment in relation to how best to manage their retirement savings. In fact, it could be argued the combined experience and expertise of this group is of much better quality than some experts, who often operate in silos.

So why doesn’t anyone ever ask the opinion of SMSF members?

We think the answer to that question is because most discussion around superannuation is driven by a turf war between large superannuation fund industry associations and professional bodies, all of which have at one time or another claimed to be the peak body representing SMSFs. It’s funny how none of these peak bodies actually offers a membership to SMSF trustees.

These days we hear many self-appointed industry experts calling for review after review after review. An example of what we are talking about is highlighted by recent comments from professional associations calling for a review of the laws around borrowing in superannuation.

Where is the evidence the laws around limited recourse borrowing arrangements (LRBA) are flawed or being abused? The law is there and SMSF members should be entitled to rely on it. Our members have received assurances from the government there is to be no detrimental change to the SMSF laws and find it disturbing professionals who have our members as clients are seeking further regulation.

In fact, the process of putting an LRBA in place is seriously self-regulated, with lenders requiring a long list of checks and balances in addition to what is required by law. This fact demonstrates practical experience and a thorough understanding of what’s involved in actually implementing an LRBA helps before calling for a review.

The only reason an LRBA is an issue is because industry and retail superannuation fund representatives have done all they can to create fear about the use of borrowing, while many of the property trusts they invest in are significantly geared. When will they realise people are more engaged with their superannuation now than ever before? This means they have to listen to the superannuation fund members or continue to lose market share.

The same applies to the professional bodies. They need to listen to the members of SMSFs and stop making comments without first understanding the opinions of the very group of people they claim to represent.

ATO figures at 30 June 2013 showed total SMSF assets stood at about $495 billion. Today we are looking at closer to $550 billion. Whatever the numbers, there is one thing for certain and that is SMSFs are the largest sector of the superannuation market and this means everyone needs to start listening to what we have to say.

As the “voice for SMSF members”, ASMA has identified the three most important issues concerning SMSF trustees at the moment.

  • The number of members allowed in an SMSF being restricted to four. Our members would like to see this restriction changed so an SMSF could become a true family superannuation fund. There is no reasoning for this number and scant attention was given to it in the Cooper review.
  • Housing affordability. Many of our members see their children and grandchildren suffering due to Australia’s housing affordability crisis. Surely there is some way of garnering support from the super sector in the same way as the system in New Zealand.
  • Increases to the ATO SMSF supervisory levy without any explanation about the increases.

Let’s see if anyone is listening.

 

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