Professor Deborah Ralston, Chair, SMSF Association 2019 National Conference Opening Address

Welcome to the National Conference – once again we have an outstanding program for you.

The next three days will present you with an opportunity to gain new knowledge, insights and understanding of our ever-evolving SMSF world. On this note I would like to thank Hannah Lennock and the members who volunteered to be part of the National Conference Technical Program Committee for compiling such a great program.

And there is certainly much to discuss. Since our last National Conference, a year ago in Sydney, the superannuation and financial services landscape has continued to shift and change. It is not a brave prediction to say that change will continue to flow in the months to come.

Over the last twelve months we have seen ongoing development of the FASEA education and ethical standards, which apply from this year. This has been a long process with the Association working on multiple submissions representing members’ views and concerns as to how the new standards should be implemented. The last standards were finalised last week, with the final code of ethics legislative instrument published. However, we know that the real impacts of the FASEA standards will be borne out over the next 5 years as you rise to the challenge of meeting the new standards.

In March we saw the Australian Labor Party announce its policy to remove the refundability of excess franking credits – a policy impacting directly on self-funded retirees and SMSF members. What was striking about this policy was the inequitable impact it has on SMSFs compared to other superannuation funds. The Association has been working hard to highlight the unfairness of this policy. To this end we have formed the Alliance for a Fairer Retirement System, bringing together 9 national superannuation, retirement and investor bodies to oppose the policy.

In May we saw the Federal Budget handed down, and with it a Government policy to allow some SMSFs to enter a three-year audit cycle. Throughout the year we have worked hard to support our specialist auditors and illustrate to Treasury issues with the proposal, especially its impact on the integrity of the SMSF sector.

The Productivity Commission’s draft report on competition and efficiency in superannuation was released in May. This draft report suggested that SMSFs are not cost-effective compared to APRA-regulated super funds, below a balance of $1 million. A conclusion that drew attention to the paucity of accurate cross-sectoral superannuation data, and the resultant difficulties in making comparisons between SMSFs and APRA-regulated funds. With assistance from our platform provider partners, the Association was able to successfully argue that the data and methodology used by the Commission to make these comparisons was flawed.

The Commission handed the final report to Government late in December 2018 and it was published by Government in January. Thankfully, the Commission listened to us and other SMSF experts and revised their cost-effective figure for SMSFs to $500,000. While we believe better data could see this figure fall lower, it is a vast improvement on where the Commissions started from.

In June of 2018 ASIC published its Report 575 on the quality of advice being provided to SMSF trustees. The Report raised some serious issues regarding the advice being provided to SMSFs which was concerning, especially given the high reliance SMSF members place on financial advice. However, a silver lining from this report was the recommendation from ASIC that SMSF advisers should have completed specific SMSF education.

Finally, the Royal Commission. While SMSFs were excluded from its terms of reference, the Royal Commission’s focus on financial advice and wealth management meant that our sector would not be left alone. Commissioner Hayne’s final report handed down this month saw a number of significant recommendations for financial advice and superannuation. We support Commissioner Haynes goals to end fee for no service scandals, remove conflicts of interest, professionalise advice and stop hawking of superannuation products. However, careful and considered implementation is needed.

Thanks to these issues, and other more mundane legislative change, the Association has been able to successfully advocate on your behalf throughout the year. Some advocacy wins over the past 12 months have included most notably:
• Several improvements to the FASEA education standards
• The Productivity Commission’s revised view on inefficient SMSF balances;
• Recommendations from both the Productivity Commission and ASIC on the introduction of specialist SMSF education requirements for advisers – a long standing policy position of the Association, and
• the implementation of digital rollovers with a carve out for SMSFs that only have non-concessional contributions.

In addition, we succeeded with a raft of technical changes that simplify the superannuation and tax laws for SMSFs.
In the face of all this change, the Board and the Exec team have been putting together a new three-year strategy for the Association as the peak body for the SMSF industry. While many things have changed, recent events have only served to:
• reaffirm our essential vision and mission.

Our vision is to enable Australians to take greater control of their own destiny through a sustainable SMSF community.

Our mission is to lead the professionalism, integrity and sustainability of the SMSF sector.

Events have also:
• repeatedly emphasised the importance of a high standard of professional education – in an increasingly complex SMSF world – we would like to see our SSA and SSAud as a minimum standard for those involved in the sector, and
• confirmed the importance of our ability as the peak body to speak for the sector – the whole SMSF community.

It has become increasingly clear that in order to preserve the integrity of the sector we need, not only to have outstanding professional advice, but also ensure that trustees are well aware of their responsibilities. ASIC and the Productivity Commission strongly pointed to the importance of financially literate and knowledgeable SMSF trustees.

We need to work with professional members to assist in building a trustee education network. I know that this has over time been a somewhat contentious issue for some members, but this is a nut we have to crack. Bringing unadvised trustees into our skilled network of professionals and ensuring that all trustees are well informed will be essential as we go forward. I don’t need to tell you about the critics who wait to see poor practice in SMSFs.

Our ability to deliver on these intentions and build a really strong SMSF Association will depend not only having a strong member-centric culture, ensuring sufficient financial capacity to deliver, but also having the right people on our staff, on our committees and on our Board. We are also very cognisant of the importance of:
• the technology and systems we employ, and,
• the partnerships we form with other providers, regulators and in some cases competitors,
to help us deliver the outcomes you are wanting.

We look forward to engaging with you on our strategic direction as it evolves and will provide opportunity for input.

To start this process the Board and Exec team had an excellent strategy session in Adelaide last month with the National Membership committee – we look forward to sharing this with you in due course.

Before I close, I would be remiss not to mention the outstanding work done by the Association’s team this year.

To John Maroney our CEO and his extremely able team in based in Adelaide and Sydney – well done – once again punching well above your weight.

There have been many achievements at SMSFA aside from the advocacy I spoke about earlier. While Jordan and Franco have been churning out the submissions, our education and CPD team have been busy delivering updates, webinars, and quality material for the website. Peter Hogan has flown the length and breadth of the country, repeatedly to present to local communities, conferences, and corporate partners. Craig Jameson has worked with our partners, and delivered some great new partnerships this year, not least of which is OpenInvest. This year Josh Geers has not only counted the money, but overseen digital marketing, and stepped up as a highly efficient company secretary.

And of course we would not be here today without Tamara Vermeend, Tarun Malhotra and the events team, and we are delighted to have the very capable Jessica Beare with us once again as our National Marketing and Communications Manager.

Our Association Committees have also met throughout the year – thanks to all of you who have participated, but especially to our National Membership Committee who really ensure we “keep it real” and serve the needs of members.

To my colleagues on the Board – many thanks for your enthusiasm and commitment. We were sorry to say goodbye last year to Peter Crump and Brett Kenny, but very pleased to welcome Liam Shorte to the group.

As you may know we have called for expressions of interest for one Board vacancy – I am delighted to say we have had a very strong field of almost 30 nominations which the Nominations and Remuneration Committee will be carefully working through in order to make a recommendation to the Board. Don’t worry if you have missed out – there will be a second EOI round later this year.

It now only remains for me to introduce our Chief, our team leader, our CEO John Maroney.