Surge in SMSF costs predicted
Small Australian Prudential Regulation Authority (APRA) funds should be included on the approved product lists (APLs) of accountants and advisers as an alternative to self-managed superannuation funds (SMSFs), according to an industry consultant, John Wiseman.
Wiseman, who is a past advocate of professional trustee arrangements with respect to SMSFs, said he believed small APRA funds should at least be included in a Statement of Advice (SOA) as a recommendation or as an alternative strategy for many SMSF trustees/members who will require advice regarding their options, not only post 1 July, but now.
"In most cases this is not going to happen unless the AFSL (Australian Financial Services Licence) holder/dealer group starts the training/education for the authorised representatives and has the appropriate products on their APLs," he said.
Wiseman is arguing that one of the consequences of the new accountants licensing regime will be an inevitable increase in fees and costs for trustees and members.
"These [the increased costs] will be substantial as the cheap, DIY days are about to come to an abrupt end," he said. "As one of the primary motivators for SMSFs has been fees and charges, the new reality will see many seeking to exit their fund and some options they may need to consider are rolling over into a retail/industry fund or public offer, converting to a small APRA Fund or withdrawing from the fund if the Condition of Release conditions are met."
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