Industry fund boss issues warning on SMSF understanding
Investors attracted to self-managed superannuation funds (SMSFs) need adequate understanding of the underlying costs, according to the chief executive of industry super fund CareSuper, Julie Lander.
Lander has warned there is a big difference between a member controlling their own money compared to administering their own fund.
The complexity of reporting, compliance requirements and high costs associated with SMSFs could result in greater financial pressures for retirees.
"Many investors attracted to establishing an SMSF have little understanding of ongoing compliance costs and the severe fines they potentially face if they don't comply with a raft of complex regulatory requirements," Lander said.
Adviser fees pushed costs up even further, according to Lander.
"What brings this cost into question is that a majority of SMSFs are invested in cash, term deposits and Australian equities," she said.
"These investment options are available via CareSuper at a fraction of the cost."
The not-for-profit super fund launched a direct investment option last December in response to the needs of investors who did not want the burden of trustee obligations.
The ASX300 investment option will be expanded to include term deposits, exchange-traded funds and listed securities this year.
Other funds to incorporate direct investment options include Club Plus Super, AustralianSuper, legalsuper and Telstra Super.
AUTHOR
Staff Writer
Recommended for you
With just 30 per cent of Australians knowing their superannuation balance to the nearest $1,000, Findex has emphasised the role of financial advice in addressing the critical super knowledge gap.
Underestimating the cost of insurance by almost $75,000 in a Statement of Advice is among multiple reasons that a relevant provider has faced action from the FSCP.
Financial Services Council chief executive, Blake Briggs, is urging Minister for Financial Services, Stephen Jones, to take advantage of the QAR opportunity to reduce regulatory duplication and ensure advice is affordable.
Former chair of the House of Representatives’ Standing Economics Committee, Tim Wilson, is planning a return to politics after losing his seat in the 2022 federal election.
