Proposed SMSF compensation warning “too simplistic”, says SPAA
Warning self-managed super funds (SMSFs) that they are not entitled to compensation is too "simplistic" and needs to factor in all financial assistance available, according to the SMSF Professionals' Association of Australia (SPAA).
In its submission to the Australian Securities and Investments Commission's (ASIC's) proposed requirements on the disclosure of SMSF risks, SPAA said that this approach ignored the complex nature of financial assistance for funds under Part 23 of the Superannuation Industry (Supervision) Act.
"APRA-regulated funds are not guaranteed compensation under the SIS Act for fraud or theft and the fact that SMSFs do have other avenues for seeking compensation for theft or fraud has been ignored," SPAA chief executive Andrea Slattery said.
The proposed disclosure perpetuates the "common misconception that APRA-regulated funds will definitely receive compensation if the fund is a victim of fraud or theft", the submission stated.
Slattery said SPAA supported improved risk disclosure for SMSFs, but that any information provided on financial assistance should be made in the broader context of advisers discussing all compensation arrangements available.
AUTHOR
Staff Writer
Recommended for you
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.
Morningstar is going to offer research ratings of funds in the $3.5 trillion superannuation sector for the first time in response to demand from financial advisers.
Treasurer Jim Chalmers has opened a consultation into the design of the annual superannuation performance test, canvassing views on a range of reform options.
