The SMSF Association has rejected a call made by the Australian Council of Trade Unions (ACTU) for a fresh inquiry into the sector based on the findings of the Productivity Commission (PC) superannuation review.
The suggestion from the ACTU stems from the PC’s view that SMSFs with an asset balance under $500,000 are not cost-effective and perform poorly.
“It has been clearly demonstrated that the PC’s analysis showing SMSFs with less than $500,000 are underperforming the APRA (Australian Prudential Regulation Authority)-regulated funds used highly questionable data about SMSF investment returns and costs, as well as poor methodology, to reach this conclusion,” SMSF Association chief executive John Maroney said.
“Certainly, there are more than enough question marks about the PC’s analysis to dismiss any call for another inquiry, especially when the PC, in its final report, said there should be no barriers to individuals setting up an SMSF and that these funds provided a ‘key source of choice’ in Australia’s increasingly concentrated superannuation sector.
“In addition, this type of simplistic analysis ignores the non-financial benefits that many SMSF members believe they can only achieve in overseeing their own fund, including greater control, flexibility and transparency.”
Maroney’s response comes in the wake of ACTU assistant secretary Scott Connelly’s comment that there should be consistent scrutiny of SMSFs that are not providing for their members.
In his reply to Connelly’s statement, Maroney pointed out there had already been three recent inquiries into SMSFs that resulted in no recommendations for changes to the sector.
“The Cooper review (2010), the Murray inquiry (2014) and the PC (2018) have not recommended restrictions for SMSFs or tighter regulation of the sector,” he said.
However, he did reiterate the association’s agreement with recommendations from the Australian Securities and Investments Commission and PC for a mandatory requirement to have financial advisers undertake specialist training before they can service SMSF clients.
“Raising the standards of SMSF advice through specific education requirements has long been the mantra of the association and a key focus in our mission to lead the professionalism, integrity and sustainability of the $726 billion SMSF sector,” he noted.