Are SMSF trustees clients?

The trustees of self-managed superannuation funds (SMSFs) need to be regarded as consumers of professional services rather than providers of a superannuation product, according to the Self-Managed Superannuation Members Association (SMSMA).

Commenting on the range of submissions forming the Federal Government’s current review of the SMSF sector, the association has argued that the status of SMSF trustees is unclear in the minds of most of the major industry players.

The chief executive of the SMSMA, Peter Bishell, said the status of SMSF trustees was important in terms of future governance of the sector and the regulations that the Government ultimately saw fit to put in place.

“If SMSF trustees are to be considered ‘clients’ of professional service advisers, changes to governance issues will focus on the standards of education and knowledge amongst the service providers,” he said.

Bishell said there was no question that trustees were consumers of professional services and that by law, they had a relationship with a qualified auditor and in many cases an actuary.

Discussing the question of the penalties that could be imposed on SMSF trustees and their status as clients, Bishell said that unless and until professional advisers were prepared to take full legal responsibility for the operation of their clients’ SMSFs, there was a need to work towards a community of adequately informed trustees.