The ATO has given the SMSF sector a clean bill of health amid the super reform challenges as it looks to lift trustee education and literacy in the next 12 months.
“I do think the SMSF sector is in very good shape currently,” ATO SMSF segment assistant commissioner Dana Fleming told selfmanagedsuper.
“Next year is our 20-year anniversary as regulator and, by and large, people do the right thing.”
However, Fleming revealed a key area requiring more work from the regulator.
“As a result of ASIC’s [Australian Securities and Investments Commission] SMSF review, the one thing we would like to focus on a bit more is trustee education and literacy, particularly over the next 12 months,” she said.
“And for us to communicate as much as we can around what it means to manage and run an SMSF, and what the members’ obligations are.
“The report found about a third of members did not expect that the setting up and running of their fund would be as time-consuming, and one-third didn’t know they needed an investment strategy.”
ASIC published “Report 575 SMSFs: Improving quality of advice and member experiences” and “Report 576: Member experiences with self-managed superannuation funds” in June.
The corporate regulator also conducted market research, including interviews with 28 consumers who had established an SMSF and an online survey of 457 consumers who had established an SMSF.
The research revealed many did not fully comprehend the risks of SMSFs or their legal obligations as trustees.
The online survey revealed 38 per cent of respondents found running an SMSF more time-consuming than expected, 32 per cent found it more expensive, 33 per cent were unaware the law required an SMSF to have an investment strategy and 29 per cent were under the impression SMSFs have the same level of protection as prudentially regulated super funds in the event of fraud.