Regulatory changes including the licensing of accountants have added an extra $2,000 in fees per year to the running of a self-managed superannuation fund (SMSF).
That is the assessment of the SMSF Association which has told the Productivity Commission inquiry into superannuation efficiency and competitiveness, that the introduction of the $1.6 million transfer balance cap represents an example of a policy that will materially affect the behaviour of SMSF trustees.
“This will involve the continual monitoring of event based reporting to the Australian Taxation Office (ATO) and increased contact with intermediaries such as a financial advisor or accountant,” it said.
“Further, the inclusion of superannuation as a financial product under the AFSL [Australian Financial Services Licence] regime requires financial advisers to be licensed when giving advice relating to a member’s SMSF. This has resulted in statements of advice being required in an environment when in the past they have not been. The SMSFA estimates that recent regulatory changes could cost an SMSF an extra $2,000 in fees per year where additional advice is required.”
“The SMSFA is completely supportive of measures that increase the standard of financial advice and integrity in the superannuation system but note these changes also can have adverse effects on the competitiveness and efficiency of the superannuation system,” the submission said.
The SMSF Association has also expressed concern at the time it takes for Australian Prudential Regulation Authority (APRA)-regulated funds to roll over superannuation balances into self-managed funds, arguing this problem could be addressed by the implementation of a centralised clearing house.
“Currently the process for rolling over superannuation from an APRA-regulated fund is inefficient and anti-competitive. Roll-over processes to SMSFs are inconsistent amongst funds. Some funds utilise digital platforms to rollover funds to SMSFs while many APRA-regulated funds still require members to submit roll-over requests via paper forms which are sometimes not available through their website,” the submission said. “This makes transferring retirement savings to an SMSF an inefficient exercise.”
“Allowing individuals to orchestrate a transfer of their retirement savings to an SMSF through a centralised clearing house would improve the efficiency and competitiveness of superannuation,” the submission said.