The FSI report is yet further proof that the self-managed superannuation fund (SMSF) sector is operating well, according to Superannuation Australia, a wholly owned subsidiary of Taxpayers Australia.
Superannuation Australia was initially concerned the FSI report would recommend unnecessary further regulation of SMSFs, such as mandating minimum account balances, limitations on setting up a SMSF and requiring a minimum education standard for trustees.
“The FSI has realised what other reviews, such as the Cooper review, have found. Despite the derogatory comments coming from the APRA superannuation sector, SMSFs are well run and not a risk to the system,” says Reece Agland, Superannuation Products and Services Manager at Superannuation Australia.
“To be honest, we were concerned that an inquiry headed by a former banking chief would be prejudiced against SMSFs. Those fears were unwarranted,” Agland says.
The only recommendation Superannuation Australia does not support is the one banning SMSFs from borrowing.
“We understand the concern with borrowing. It makes us all a bit uneasy,” Agland says. “But the main concerns we have with borrowing is the quality of the advice, and advice given outside of the protection of the financial services legislation.”
“The solution in our mind is requiring Limited Recourse Borrowing Arrangements in a SMSF to be a ‘financial product’. That way, advice can only be given by a licensed financial adviser who is covered by the best interest duty.”
