SPAA message to FSI: SMSF sector performing well

The SMSF sector was a well-functioning, efficient and allowing many Australians to meet their retirement income goals, the SMSF Professionals’ Association of Australia (SPAA) said its final submission to the Financial System Inquiry (FSI).

SPAA CEO/Managing Director Andrea Slattery said the FSI’s draft report was “positive” about the SMSF sector, and where it did raise several queries SPAA was confident that its submission would allay any concerns.

“This was the final outcome with the Cooper Review in 2010 when it found the SMSF sector was a well-functioning part of the superannuation industry, and we believe the FSI will reach the same conclusion in its final report.

“SMSFs are essential to provide consumer choice and competition within superannuation and have been critical in increasing Australians’ engagement with their retirement savings.”

She said SPAA was hopeful the FSI’s final recommendations would give trustees, and the professionals who advise them, some fresh insights into how to achieve improved outcomes in the future.

She added that the fundamentals underpinning the SMSF sector were sound, and as such SPAA had strongly recommended to the FSI that there was no need for any restrictions on establishing an SMSF – either a minimum balance or trustee education requirements.

“SMSF establishment should be an informed and educated choice by an individual based on their personal circumstances and there should no barriers to them making this decision.  SPAA also recognises the need for appropriate and high quality financial advice to assist people make this important decision.”

Slattery says SPAA’s submission gave the FSI “hard evidence” that showed it did not need to be concerned about SMSF operating expenses.

“We showed that SMSF costs are generally low, driven by a range of SMSF administration service offerings that suit different trustee’s needs.

“The cost of operating an SMSF is only one factor in a person deciding to establish an SMSF with control, flexibility and planning for retirement other key motivators in establishing a fund,” she said.