Allegations that SMSFs don’t provide information ‘spurious’

Allegations that SMSFs don’t provide the same level of information about their asset allocation as the larger APRA-regulated funds are simply spurious, says Andrea Slattery, CEO of the SMSF Professionals’ Association of Australia (SPAA).

Slattery was responding to a submission to the Financial System Inquiry (FSI) that alleged there was a lack of information about the asset holdings of SMSFs and that this made it difficult to assess the extent of any risks in the system.

“This really is a case of the pot calling the kettle black – and is so far removed from the reality.

“Look at the annual returns required to be completed by SMSFs and APRA-regulated funds and it’s easy to see which sector provides the greatest level of detail. It’s all there in the Australian Taxation Office (ATO) files, SMSF by SMSF.

“ATO reports on SMSFs not only disclose the number of new funds, details about members, their ages and how much they are earning, but also disclose information about the fund’s investments split into 19 investment categories. By contrast, APRA-regulated funds report under the cover of broad aggregates that reveal nothing specific about their asset allocation.

“Significantly, overseas superannuation funds that are much larger than their Australian counterparts currently provide significant and specific information as part of a continuous disclosure regime that enables their members to gain immediate access to fund investment allocations on a daily basis.

“Changes to reporting of investment allocations by APRA were highlighted in the last APRA quarterly report showing the aggregates all fund assets, as well as the number of entities with more than four members. This broad level of detail provides less insight into APRA-regulated funds than previously reported.

“Now this broad information will have to be reported annually, although this still lags the SMSF sector where significant levels of detail are reported quarterly and annually in a transparent and comprehensive way by the ATO.

“The fact is there has been huge resistance by the APRA-regulated funds, even after the current superannuation system has been operating for more than two decades, to disclose their investments.  This is something they will need to do, to some degree, in the future ­– but still not to the same extent as SMSFs,” she says.