The SMSF Association welcomes today’s announcement made by the Assistant Treasurer and Minister for Financial Services, Dr Daniel Mulino, in response to the fallout from the collapse of Shield and First Guardian. The Association broadly supports the range of measures aimed at protecting consumers, including SMSF trustees, preventing further consumer harm and ensuring the sustainability of the CSLR.
While a number of reforms reflect what is generally considered best practice, such as requiring SMSFs to hold uniquely identifiable bank accounts, experience shows there can be practical challenges in implementation. It is therefore imperative that these issues are worked through methodically with the sector and other key stakeholders before legislation is drafted, to ensure the measures can operate as intended in practice.
SMSF Association CEO Peter Burgess said, “Importantly, we are also pleased that the Government has listened to our concerns and will not be proceeding with cooling-off periods for rollovers to SMSFs, advice fee caps or an opt-in/opt-out CSLR special levy model for SMSFs. These were all options that were previously on the table in the lead-up to today’s final package of reforms.
“While we understand the rationale for introducing mandatory SMSF trustee education for prospective SMSF trustees, we welcome the acknowledgement of the work the Association is already undertaking in this area to support confident, informed SMSF trustees.
“We encourage the Government to keep an open mind about how best to uplift trustee competencies, including leveraging the work already being done across the sector”, Mr Burgess said.
While the Association has always opposed SMSFs paying a CSLR levy, we acknowledge the current situation and the need for the cost of compensation to be spread widely and be borne by everybody, as flagged by the Minister in today’s address.
“We do not believe it is fair that victims, including SMSF trustees, still have not received their compensation payments because the regulatory and CSLR funding model has failed them. As a stakeholder in the sector, we see the need to step up in the short term, and we would implore the Government in the spirit of ‘everybody’ to do the same.
“ASIC has secured a record $830 million in civil penalties, and we believe reform should be considered to redirect a portion of these funds back to the CSLR, just as reform will be introduced to levy the SMSF sector if a special CSLR levy is required in the future,” Mr Burgess said.
The Association acknowledges today’s announcement marks the start of further consultation to move towards implementation, and we look forward to being an active contributor. As always, the devil lies in the detail — and getting that detail right will be critical to ensuring these reforms are effective.