An industry consultant has claimed that the end of the so-called accountant’s exemption on 1 July and the requirements of the new accountants licensing regime will spell an end to low-cost self-managed superannuation funds (SMSFs).
Wollongong-based consultant, John Wiseman, has again predicted that the cost of SMSFs will increase substantially in the new accountants licensing environment — something which may give rise to people considering exiting their self-managed funds to enter retail, corporate or industry funds.
However he suggested that small Australian Prudential Regulation Authority (APRA)-regulated funds (SAFs) may be a better alternative for those wanting to exit SMSFs based on higher cost.
“A SAF may well be the ideal solution for those considering getting out of their SMSF but who feel they can’t because of tax implications of moving funds and investments,” he said.
Wiseman said he was not suggesting that SMSFs would disappear after 1 July, but he believed his predictions of a decline in their use would be proved correct.
“Far too many investors in the past were attracted to SMSFs by low or no fees. This has now come to an end with unstructured unqualified advice in the new era resulting in the severest of penalties,” he said.
“Although misunderstood in the past, SAFs are about to become a major force in the SMSF sector as they provide the perfect alternative for clients wanting the flexibility and control of a SMSF, but without all the compliance risk and responsibility of a trustee — or as part of a tax-effective exit strategy from a SMSF,” Wiseman said.
