In a statement released on Monday, SMSF Association chief executive John Maroney said that while the association agreed that SMSFs were not suitable for every client, the data used by ASIC in its fact sheet, “Self-managed superannuation funds: Are they for you?”, distorted the costs involved in running a self-managed fund.
“We take issue with the representation that the typical cost of running an SMSF is $13,900 a year,” Mr Maroney said.
“The use of averages ignores distortions from very large SMSFs and those who choose to use extensive administration and investment services.”
He said the association would seek further clarification from ASIC on its use of this figure in the fact sheet, given that industry data indicated the annual expenses involved in running an SMSF could be as low as $5,000.
In addition, the SMSFA took issue with the regulator’s claim that SMSFs with balances below $500,000 underperformed APRA-regulated funds, given it was hard to make an accurate comparison between the two.
“For example, SMSF establishment and advice costs vary considerably to the costs incurred by APRA-regulated funds, in the process materially distorting SMSF returns, especially for new and lower-balance funds,” Mr Maroney said.
“We also argue that the cost-effectiveness debate must be extended beyond a mere analysis of net returns and costs and consider the cost of running an SMSF over the long term, as well as the varied motivations that SMSF members have in setting up their own funds, such as increased control and their individual retirement goals.”
The comments come following ASIC’s announcement of a forthcoming pilot program to send its newly published fact sheet on SMSFs out to all new SMSF trustees in November.
The fact sheet is aimed at getting trustees to consider whether an SMSF is appropriate for them, following concerns from the corporate regulator that the volume of assets in the SMSF sector may be growing too fast.
Danielle Press sits on the board for robo advice“Six Park is leading the way in giving Australian investors a trustworthy, professional alternative to that conflicted model, which is coming under increasing pressure.” she Equip super, Danielle was Managing Director i wonder which angle they are going to press forward….
Today’s Financial review (page 3) Ms Danielle Press of ASIC when asked by Tim Wilson, Chairman on Economics Committee, claims the figure of $13,900 pa was from the ATO. I have translated this into my own words and the message I get is this.. “It’s not my fault, the ATO gave me the figure.” Really, these people are meant to be adults and responsible ones at that. Ethics would be desirable but clearly, responsibility for what they publish and preach is unattainable. Having destroyed Retail Super, ASIC, on behalf of Industry Super and Fabian Comrades, will now seek the FUM with SMSF land by making statements based on BS and half truth as usual. Looks like they got caught this time and well done to those holding ASIC to account. Is this the beginning of the end for ASIC? Is the WBC case (thrashing) yet another example of the abilities of ASIC – I read that the court had to appoint council to run the case for ASIC as it had not demonstrated the case – classic stuff.
If the ATO provided the $13,900 pa cost then it probably includes advice fees for the SMSF as well. ASIC not doing their homework again and very misleading.
I actually agree in principle with ASIC on this issue. SMSFs are massively over used. Most people who have them should not.
But yet again, ASIC has failed to put a credible, evidence based argument forward. Yet again, they have misused their power to try and impose their ideology on others. Inappropriate use of unrepresentative data is a tawdry tactic that undermines trust and credibility of our regulators. I hoped ASIC’s culture would have improved with the departure of Medcraft, but seemingly it hasn’t.
Today’s Financial review (page 3) Ms Danielle Press of ASIC when asked by Tim Wilson, Chairman on Economics Committee, claims the figure of $13,900 pa was from the ATO.
I have translated this into my own words and the message I get is this..
“It’s not my fault, the ATO gave me the figure.”
Really, these people are meant to be adults and responsible ones at that. Ethics would be desirable but clearly, responsibility for what they publish and preach is unattainable.
Having destroyed Retail Super, ASIC, on behalf of Industry Super and Fabian Comrades, will now seek the FUM with SMSF land by making statements based on BS and half truth as usual.
Looks like they got caught this time and well done to those holding ASIC to account.
Is this the beginning of the end for ASIC?
Is the WBC case (thrashing) yet another example of the abilities of ASIC – I read that the court had to appoint council to run the case for ASIC as it had not demonstrated the case – classic stuff.
Fact is, most SMSF’s are not needed by the client. Accountant sees the audit and tax return dollars, client best interest is given little regard
ASIC is a basket case, full of left-wing communists who arrogantly strut around believing they know what is best for consumers. They selectively choose information to support their case. They have no interest in the truth. They don’t do any research, unless it supports their preconceived opinion. Advisers have been putting up with this nonsense for decades and we have had a gutful. If ASIC worked together with us, for the betterment of consumers, we could achieve great things.
poor accountants are copping it from all ends. technology is wiping out a lot of their traditional work, enormous margin pressure everywhere and fee resistance constantly from clients. they can’t provide financial advice and set up smsf’s now as asic is on the warpath.
what are the poor souls to do ? ATO is even automating tax returns so individuals and sme’s can just lodge their tax returns via their banks portal direct to the ato. know for a fact that both CBA and ANZ are currently working in the background and piloting this.
furthermore, a lot of other stuff like management reports etc are going to be available to sme’s free this was the “added value” services a normal accountant provided on top of the annual compliance now it’s all gone (or soon to be)
no lending (ACL), no tax (AI), no financial planning (AFSL), no added value services (very little left) (AI), audit (AI) is being attacked (parliamentary enquiry into audit quality is underway), the entire trade (not a profession) is under attack.
boy oh boy, glad i got out of it as soon as i could as i could see the future. as a fasea approved adviser, i am gonna be a monopoly provider. YAY ! Pump for Joy!
ASIC usually includes all insurance premiums as ‘running costs’ – very distorting. ASIC also reckons in this report that it takes 100 hours a year to run your own SMSF….another absolute corker……I spend about 2 hours a year on mine and outsource the tax/financials/ audit work.
The accounting industry is now seeing what has happened to financial planners for close on a decade — ASIC making up figures to match their press release which was drafted prior to the “research” being completed. As with all their other reports ASIC will provide limited clarity and just tell people they are wrong.
Well done SMSFA. These tones from ASIC & ATO seem to be the Industry Super lobby voices in disguise trying to claw back a piece of the pie there are losing