Don’t let SMSFs become the next Storm: Kell
One of Australia's regulators fears self-managed super funds (SMSFs) could expose investors to inappropriate borrowing strategies, but doesn't see a role for itself in guarding the sector.
Speaking at the Financial Services Council conference in Cairns, the Australian Securities and Investments Commission's (ASIC's) deputy chair Peter Kell said he foresaw serious potential hazards if SMSF investors and trustees did not do their due diligence.
"We've seen first hand the impact of inappropriate borrowing strategies," he said in reference to collapsed Storm Financial.
"We would want to ensure the risks in the emerging SMSF sector are administered."
However, Kell indicated when asked that he did not see a place for ASIC in that administration.
He stressed while ASIC did play a role in regulating some of the investments and advice around SMSFs, they do not currently regulate SMSF structures themselves.
"Ultimately the people who want to be involved have to take some responsibility," he said.
However, he noted an ASIC taskforce had preciously addressed some of the more wider known SMSF issues, such as property spruiking and encouraging investors with a poor understanding of their operation to partake.
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