ASIC chief executive James Shipton has admitted that the regulator’s November 2019 SMSF fact sheet is now ‘stale’, but maintains that the numbers were based on “good” and “credible” information from the Australian Tax Office when it was released.
Speaking at the Parliamentary Joint Committee hearing into oversight of ASIC this morning, NSW Liberal Party MP James Falinksi brought up the fact sheet, which ruffled feathers in the SMSF industry by estimating the average cost of running an SMSF at $13,900 per year.
“The tax office has since said that the cost is as low as $1300,” Falinksi said. “Have you changed your advice on that?”
Shipton replied that ASIC has indeed received advice that updated their previous information, and looked to Commissioner Danielle Press to provide further detail.
“The document you refer to was a pilot document and ran for about six weeks and was sent to about 4000 new SMSF trustees,” Press recalled. “It has not been distributed since.”
Press explained to the PJC that ASIC subsequently conducted a survey that revealed while the trustees found the sheet “useful”, none of them “changed their mind” about SMSFs.
“We don’t intend to continue the program but if we do we intend to update the data to reflect the new data from the ATO,” she continued.
Falinski asked why it isn’t incumbent on the regulator to make sure that the information that is out in the public domain isn’t accurate.
ASIC still needed to check the public record, Shipton replied, to make sure that no information they were updating was misleading. ‘We can say now that the information on the public domain is now stale,” he said.
When the fact sheet was originally released it was criticised for being unbalanced and based on flawed data. ASIC draw on research from the ATO and Investment Trends, which stated that it takes over 100 hours per year to run an SMSF.
“With data feeds and email making collation and exchange of information so easy these days I think this figure is at least 40-60% over estimated,” commented Liam Shorte, director at Verante Financial Planning.
As to the $13,900 cost, SMSF Association chief executive John Maroney said this was not a “typical” figure. “We think around “$5,000 would be more accurate,” Maroney stated.
According to Falinski, ASIC are compromising their “credibility” by leaving inaccurate information in the public domain.
“We will look at it and check if there is an enduring state of misinformation,” Shipton conceded.