The ACTU’s call for a fresh inquiry into the self-managed super fund (SMSF) sector based on the recent Productivity Commission (PC) Review of Superannuation is totally unwarranted, says SMSF Association CEO John Maroney.
“It has been clearly demonstrated that the PC’s analysis showing SMSFs with less than $500,000 are underperforming the APRA-regulated funds used highly questionable data about SMSF investment returns and costs, as well as poor methodology, to reach this conclusion.
“Certainly, there are more than enough question marks about the PC’s analysis to dismiss any call for another inquiry, especially when the PC, in its final report, said there should be no barriers to individuals setting up an SMSF and that these funds provided a ‘key source of choice’ in Australia’s increasingly concentrated superannuation sector.
“In addition, this type of simplistic analysis ignores the non-financial benefits that many SMSF members believe they can only achieve in overseeing their own fund, including greater control, flexibility and transparency.”
The Association was responding to an ACTU media announcement today by Assistant Secretary Scott Connolly, who said “there should be consistent scrutiny of these super funds that are not providing for their members”.
Maroney says it’s often forgotten by critics of the SMSF sector that it has had three reviews in the past decade with none of them recommending any significant restrictions or changes to SMSFs.
“The Cooper Review (2010), the Murray Inquiry (2014) and the PC (2018) have not recommended restrictions for SMSFs or tighter regulation of the sector.”
Although disagreeing with the call for another review, Maroney adds that the Association “strongly endorses” calls by the PC and ASIC for financial advisers to be required to have undertaken specialist SMSF education before being allowed to advise SMSF clients.
“Raising the standards of SMSF advice through specific education requirements has long been the mantra of the Association, and a key focus in our mission to lead the professionalism, integrity and sustainability of the $726 billion SMSF sector.”
The Association, which stressed the importance of raising the standards of SMSF advice in its 2018-19 Budget submission, wants both sides of politics to act on the advice recommendations of the PC and ASIC as part of their response to the Financial Services Royal Commission.
“This should help ensure that all financial advice provided in relation to SMSFs is in the best interests of members as is required already by law,” Maroney says.