ASIC SMSF review gets industry support

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ASIC has released proposals this week to impose specific disclosure obligations on SMSF advisers.

Although the disclosure is typical practice for most advisers, both the Institute of Chartered Accountants Australia and SPAA have said that the proposals are welcome.

“Any consideration of competency and quality of advice and level of disclosure by those service providers to the SMSF sector will further improve the health of a sector that is continuing in steady growth and performance,” said SPAA CEO Andrea Slattery.

The ICA Australia says that the review is particularly important when it comes to borrowing arrangements through SMSFs.

Institute head of Superannuation Liz Westover said that a comprehensive assessment is needed to determine whether the right policy framework exists around current borrowing rules. However, it’s vital that it is based on real and substantiated evidence, she says.

“In 2010, the Cooper Review found that borrowing was not consistent with Australia’s retirement income policy and a review was needed within two years,” she said.

“This review is now overdue. The industry needs it to happen in order to identify what changes may need to be made to the current policy settings around borrowing within SMSFs.”

The RBA has also indicated that it has concerns about the sector. In the RBA Board minutes, property gearing in SMSFs was identified by members as one area where “households could be starting to take some risks with their finances”. The board said that it would continue to monitor the area.