Disaster waiting to happen for SMSFs

The lack of education and professional requirements for self-managed superannuation fund (SMSF) trustees is a disaster waiting to happen, an industry consultant believes.

JWW Consulting principal, John Wiseman, said it was incomprehensible that current and potential future trustees were not required to complete appropriate academic courses and maintain an ongoing regime of professional development.

"Trustees should be required to have a minimum level of education to undertake an SMSF and both the government and industry should be concerned by this lack of financial literacy and competency," Wiseman said.

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"Investing in shares or buying/selling property inside SMSF frameworks is simply not an undertaking for the amateur/unqualified practitioner as the taxation implications and adverse impact on retirement nest eggs can quite literally be catastrophic when mistakes are made.

"I liken the current SMSF situation as only requiring an unlicensed car driver to undertake a course to obtain a licence only if they are involved in a road accident."

Wiseman noted it would be the spouse, family members, disabled/ financially dependent children, and business partners who could be the casualties.

"All who put their faith, financial wellbeing and prospects for a comfortable retirement in the hands of an individual and system that failed them abysmally," he said.

"To have these responsibilities in the hands of someone who is not competent and academically qualified is a disaster waiting to happen and in the end the only winners will the legal fraternity as these situations will invariably end up in the courts."

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Bit rich. Every SMSF member is a trustee of the fund, so they have actively chosen to take responsibility for their investments. The system did not let anyone down. People fought and died in past wars to protect their personal freedom and liberty, and ensure future generations would have the same rights. Please respect the hard work and lives that were laid down so people could have choices.

Not all those people had choices. I suggest you go and work in a typical public accounting firm. A fair portion of those people were ''sold'' a SMSF by the accountant, typically an easy sell during fear of the GFC, many just setting up funds to invest in term deposits or just buying the four banks. ''You know if you make a negative return this year and you make a negative return next year in another 10 years you'll have nothing left, so you need to take control Mr Consumer...take control...but it's your choice''.. yes that line works wonders. Options like hold, or switch to a more conservative option were never raised. I see many people who struggle to understand a term deposit having a SMSF. but then again accountants also fought in wars to sell, a trust deed, a chocolate shake, in a 15 minute, compulsory tax return meeting. So it's their right to take advantage of stupid people also isn't it, in return for $2K to $3K a year in fees selling at multiple times of revenue. Yes, God bless our veterans, and God bless those accountants and people who struggle with understanding when there term deposit matures in a SMSF.

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