The Doyles weather the Storm as BOQ, Macquarie and Senrac pay, the number of SMSFs established drops but SPAA says that’s not unusual and Guardian Advice announce FoFA compliance workshops.
BOQ, Senrac and Macquarie to pay compensation
The Australian Securities and Investments Commission has settled legal proceedings arising out of its investigation into the collapse of Storm Financial Limited.
The proceedings were commenced against Bank of Queensland Limited, Senrac Pty Limited and Macquarie Bank Limited on behalf of two former Storm investors, Barry and Deanna Doyle.
Without admission, BOQ, Senrac and Macquarie have agreed to pay $1,100,000, which will fully compensate the Doyles for their financial loss arising from their Storm investments, as calculated by ASIC under the compensation model it has developed in connection with Storm.
ASIC chairman Greg Medcraft said the regulator is pleased to have achieved this outcome.
‘The proceedings, which ASIC commenced in December 2010, were brought to hold the banks accountable for their role in the losses suffered by those who invested through Storm and to establish a basis upon which the Doyles, and ultimately other Storm investors, could achieve fair and adequate compensation,” he said.
“I am pleased that ASIC has been able to achieve this result and that the allegations against BoQ and Macquarie of breach of contract, unconscionable conduct and liability as linked credit providers of Storm, which were first raised in these proceedings, have provided a template for similar allegations that have been raised in class actions brought on behalf of investors against BoQ, Macquarie and CBA.”
Under a class action settlement negotiated by solicitors Levitt Robinson and Macquarie, approximately 70 per cent of class action members would recover about 18 per cent of their lost “net equity” (as estimated by Levitt Robinson).
SPAA defends March quarter drop in SMSFs
The drop in self-managed super fund (SMSF) establishments in the March 2013 quarter is no reason to question the ongoing health of this superannuation sector. This is the view of SPAA senior manager or technical and policy, Jordan George, who said the fall was in keeping with a wider trend.
“Historically, numbers for SMSF establishments in the March quarter can be softer compared with other quarters, and what happened this year is no different to that,” he said.
“What we have seen in the past is that after a drop-off in March establishments, there is a pick up in the final quarter of the financial year as we enter the tax-planning and tax-filing season. People often choose to set up their SMSF and do their salary-sacrificing tax planning at that stage of the year.”
George added that some people considering establishing an SMSF in the March quarter might have chosen to hold off due to the uncertain political environment that prevailed in the first three months of the year.
“It is understandable people want to be cautious with their retirement planning, and SPAA research has shown that policy changes and uncertainty reduce SMSF trustees confidence,” he said.
Don’t be fooled by the mechanics of FoFA
Risk specialist dealer group, Guardian Advice, will run a series of Future of Financial Advice (FoFA) workshops in June. Running nationally from June 5 to 24, with more than 200 advisers expected to attend, the full day workshops will focus on compliance, articulating the value of advice and runing a sustainable business in a post-FoFA world. Guardian Advice head Simon Harris said the workshops will ensure advisers have the knowledge and tools to clearly demonstrate the value of the advice they provide to their clients.
He added that other groups has missed the mark in their FoFA preparation by not focusing on how advisers can create stronger, more regular engagement with their clients.
“People have got too caught up in the mechanics of FoFA, when really the key requirement of FoFA is about better client engagement, and communicating the value of what advisers do for Australians every day,” he said.
“Under FoFA, upfront and ongoing fee disclosure will become even more transparent to consumers, and advisers will need to prove the value of their advice and that it is worth paying for.”
In relation to the “drop” in SMSF establishments you should pretty much ignore the initial quarterly ATO published statistics. Cerainly there is no evidence to suggest that the drop has anything to do with the uncertain political climate. An SMSF Trustee has 60 days to lodge the election form with the ATO so there is always a lag in the numbers. For example the SMSF establishments for the Dec2012 quarter were initially reported as 7,014 this has been upgraded to 9,748 funds in the latest report.
Similarly SMSF establishments for Mar 2012 were reported as 7,152 funds and this is now stated as 9,863 funds.
Long term statistics are a better guide. Fund establishments for the last 4 calendar years are now reported as –
2009 – 30,307
2010 – 31,703
2011 – 36,359
2012 – 42,687
So are the numbers declining?