Regulatory uncertainty is now the top challenge facing self-managed superannuation funds (SMSFs), according to new research released by the SMSF Association and conducted by Investment Trends.
The SMSF Association has released the research as part of the inaugural SMSF Week which found that the imposition last year of the $1.6 million transfer balance cap had moved the superannuation goal posts while also pointing to the Federal Opposition’s proposal to remove franking credits.
It said that in circumstances where 60 per cent of SMSF investors aged 65 or older planned to invest in blue-chip shares in the next 12 months, this represented a problem.
“These blue-chip shares commonly encompass strong yields from franking credits,” it said. “Removing or limiting refundable franking credits on dividends would turn the world of many self-funded retirees upside down.”
Commenting on SMSF Week, SMSF Association chief executive, John Maroney said it was aimed at providing answers and dispelling misconceptions with respect to SMSFs.
“SMSFs place you in the driver’s seat to take control of your retirement savings, but with more control comes more responsibility. However, it does not mean you have to manage everything yourself,” Maroney said. “SMSFs demand time, commitment, a strong level of financial literacy and should always be set up with the right expert assistance and this is not for everyone.”
“As the old adage goes, it takes a village to raise a child; and it will take a range of advisers to build your SMSF throughout your investment journey. Don’t fall into the trap of taking control of your retirement savings only to risk the best outcomes without the right expert assistance,” he said.
The SMSF Association will also use SMSF Week to continue to educate Australians that SMSFs do not need $1 million to be cost effective.
According to SMSF Association research SMSFs can be appropriate and cost effective well below this amount depending on the trustee’s individual circumstances.
“Regulatory instability will always be difficult to navigate, but specialist SMSF advice can help all SMSFs cope with regulatory changes,” Maroney said.