LOGIN JOIN SHARECAFE SIGN UP FOR OUR NEWSLETTER ADVERTISE
share cafe logo  
 
SHARECAFE SUPER & RETIREMENT

The Need For SMSFs To Act Responsibly
BY BELINDA VON KNOLL - 15/08/2016 | VIEW MORE SUPER ARTICLES

Since self managed superannuation funds (SMSF) first became available as an option for holding superannuation balances in 1994 they have made the headlines, both in positive and negative ways.

They have grown from a child who does not really understand what they are doing, to a teenager who has tried everything, made mistakes but ultimately learnt some life lessons and moved into adulthood and maturity. With adulthood comes both responsibilities and opportunities.

What has become increasingly evident over the last few years is SMSFs are here to stay. They are now the largest sector of the superannuation industry with 503,320 SMSFs as at the end of March 2013 holding $496.2 billion in assets. The average fund balance is now $986,000 with the average member account being $510,000.  In contrast ten years ago SMSFs represented one tenth of superannuation monies.

What is also evident is the SMSF sector is still in many ways misunderstood. When Jeremy Cooper went into the Copper Review he expected from anecdotal evidence to find abuses and areas which required attention. Instead he found a sector which in the main functioned well with only minor areas requiring attention.

However even after his findings, as recently as this year, with the mania surrounding the proposed super changes, SMSFs were still an area of contention and misrepresentation.  I remember well my surprise at reading an article in a reputable newspaper which talked of the free kick SMSFs received when they moved from accumulation to pension phase without the need to sell assets and trigger capital gains tax. According to the paper this was a benefit only available to SMSFs which surprised me greatly as I had many retail clients who had been afforded the same opportunity. I suspect the real issue was that this was not a feature available in some industry funds!

The important factor in my eyes, is with the massive growth in the SMSF sector comes responsibility. If we wish to continue to see this sector grow we need to ensure we operate in a professional, responsible and ethical way. It is up to all of us involved in the industry from financial advisers, accountants, auditors and investment managers to continue to educate our SMSF Trustees and fund members on their responsibilities and obligations.

Education has become the holy grail of the SMSF sector. No longer is it, nor should it ever have been, acceptable for SMSF Trustees to abdicate their responsibilities through the delegation of tasks to other professionals. On the same note it is not acceptable for us as professionals to not continue to work with our trustee clients to educate and inform them, as we owe it to them, and to the whole SMSF sector, if we are to see continued improvement in the professionalism with which it is run. This will enable the SMSF sector to continue to grow, thrive and prosper in adulthood and then maybe with time, SMSFs will be less misunderstood and maligned.


Belinda is a Private Client Adviser in Shadforth Financial Group’s Perth office. Belinda holds a BA in Comparative Literature, a Graduate Diploma in Financial Planning and is a Specialist SMSF Advisor with SPAA (the Superannuation Professionals Association of Australia). She is also the Secretary of the WA Branch of SPAA.

To learn more about Belinda, view her online profile.




 

RECENTLY ADDED TO SHARECAFE


 › Marcus Today End Of Day Report
 › Tuesday At The Close
 › Brokers Keen On Cleanaway-Tox
 › Cleaner Focus For Gale Pacific
 › Review Of 2017, Outlook For 2018 - Still In The 'Sweet Spot', But Expect More Volatility Ahead
 › Market At Midday On Tuesday
 › Six Reasons To Be Wary Right Now
 › Why A Rise In Rates Won't Mean Much
 › The Quest For Trading Truth
 › How Skyscrapers Predict Market Crashes?
 › Overnight: Crypto Crazy
 › MIN - Morgan Stanley rates the stock as Overweight
 › RAN - Morgans rates the stock as Hold
 › AGL - UBS rates the stock as Buy
More ShareCafe   

GET THE SHARECAFE BREAKFAST BRIEFING


Delivered free to your inbox before the market opens each trading day. Sign up below +

SHARECAFE VIDEO


View More Videos