Fraud not specific to SMSFs

Self-managed superannuation funds (SMSFs) are not a specific target for illegal early release superannuation schemes, according to the chief executive of the Self Managed Super Fund Professionals' Association, Andrea Slattery.

"Every year, there's been some sort of fraud perpetrated on the super sector but it's mainly been in the APRA fund sector," she said. "There have been a range of things over the years and yes, SMSFs have occasionally experienced fraud but the target here is the super system and the banking system as a whole."

And on the back of the Parliamentary Joint Committee inquiry into the collapse of Trio Capital, Slattery said that the key issue when it came to fraud was compensation.

"The key point here is that the APRA fund members were able to be recompensed but the SMSF members were not," she said. "So none of the direct investors were able to get recompense and, in this instance, an SMSF member is actually very similar to a direct investor."

"And what Trio highlighted was that Opes Prime and Storm and Westpoint were all about people who weren't able to be compensated for their losses through poor advice."

As a criminal act that's been perpetrated on either the super or the financial services system, Slattery said fraud needed to be addressed as an entire industry.

"In fact, with the new SuperStream rules, it's important to realise that they're being brought in not just to streamline the system and drive efficiency but to stop the opportunities for fraud to occur," she said. "It's closing down those loopholes that exist within payments and rollovers and all paper-based transactions."