The SMSF Association has warned that self-managed superannuation funds may get dragged into the Royal Commission into misconduct in the banking, superannuation and financial services industry as industry funds seek to deflect attention.
Out-going SMSF Association chairman, Andrew Gale told the organisation’s national conference that although the terms of reference of the Royal Commission excluded SMSFs, there remained the potential for our sector to be included in the work of the inquiry via three key avenues:
- The Advice and conduct issues of Australian Financial Services Licensees are included specifically in the terms of reference, and this could include SMSF advice and recommendations to establish an SMSF.
- Secondly, with large superannuation funds included in the terms of reference and under scrutiny, we expect the large fund sector, especially industry funds, to seek to deflect attention by pointing out issues with SMSFs. Issues raised could include minimum reasonable account balance sizes for SMSFs and Limited Recourse Borrowing Arrangements.
- Finally, there is a small possibility that the terms of reference of the Royal Commission are expanded to include SMSFs or related fields.
“On a positive note, it’s worth noting that prior enquiries into superannuation have found the SMSF sector to be functionally well with a high level of compliance,” Gale said.