The SMSF Association has rejected a call by the Australian Council of Trade Unions (ACT) for a fresh inquiry into the self-managed super fund (SMSF) sector based on the recent Productivity Commission (PC) Review of Superannuation.
SMSF Association chief executive, John Maroney said the ACTU call was totally unwarranted.
His comments came at the same time as questions were asked at the Conference of Major Superannuation Funds on the Gold Coast questioned why SMSFs had been specifically excluded from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
Maroney dismissed the ACTU’s calls saying it had been clearly demonstrated that the PC’s analysis showing SMSFs with less than $500,000 were underperforming the APRA-regulated funds had used highly questionable data about SMSF investment returns and costs, as well as poor methodology, to reach the conclusion.
“Certainly, there are more than enough question marks about the PC’s analysis to dismiss any call for another inquiry, especially when the PC, in its final report, said there should be no barriers to individuals setting up an SMSF and that these funds provided a ‘key source of choice’ in Australia’s increasingly concentrated superannuation sector,” he said.
“In addition, this type of simplistic analysis ignores the non-financial benefits that many SMSF members believe they can only achieve in overseeing their own fund, including greater control, flexibility and transparency.”
The ACTU assistant secretary, Scott Connolly, has claimed there should be consistent scrutiny of SMSFs who he claimed were not providing for their members”.
Maroney said it was often forgotten by critics of the SMSF sector that it has had three reviews in the past decade with none of them recommending any significant restrictions or changes to SMSFs.
“The Cooper Review (2010), the Murray Inquiry (2014) and the PC (2018) have not recommended restrictions for SMSFs or tighter regulation of the sector.”
Although disagreeing with the call for another review, Maroney adds that the Association “strongly endorses” calls by the PC and ASIC for financial advisers to be required to have undertaken specialist SMSF education before being allowed to advise SMSF clients.