Proposed SMSF compensation warning “too simplistic”, says SPAA
Warning self-managed super funds (SMSFs) that they are not entitled to compensation is too "simplistic" and needs to factor in all financial assistance available, according to the SMSF Professionals' Association of Australia (SPAA).
In its submission to the Australian Securities and Investments Commission's (ASIC's) proposed requirements on the disclosure of SMSF risks, SPAA said that this approach ignored the complex nature of financial assistance for funds under Part 23 of the Superannuation Industry (Supervision) Act.
"APRA-regulated funds are not guaranteed compensation under the SIS Act for fraud or theft and the fact that SMSFs do have other avenues for seeking compensation for theft or fraud has been ignored," SPAA chief executive Andrea Slattery said.
The proposed disclosure perpetuates the "common misconception that APRA-regulated funds will definitely receive compensation if the fund is a victim of fraud or theft", the submission stated.
Slattery said SPAA supported improved risk disclosure for SMSFs, but that any information provided on financial assistance should be made in the broader context of advisers discussing all compensation arrangements available.
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