In a statement released on Friday, Investment Collective managing director David French said the statistics provided by ASIC in its fact sheet, Self-managed superannuation funds: Are they for you?, contained “seemingly deliberate inaccuracies”, particularly around the expenses involved in running an SMSF.
“ASIC claims that the average cost of running an SMSF is $13,900 per annum — the data apparently came from the Productivity Commission, but ASIC has made no attempt to explain that this average is distorted by the costs of some very large funds, and has not been considered in relation to the services that are included for the money,” Mr French said.
“In my experience, costs specific to running an SMSF rarely exceed $1,500 per annum.”
He added that figures used in the fact sheet showing APRA funds outperforming SMSFs in a number of cases could not be relied upon for an accurate comparison, given the varying risk profiles and objectives of SMSF members.
“ASIC knows it’s on shaky ground in reporting Productivity Commission return figures for SMSFs, that’s why it has included a footnote to cover the inadequacies of the data,” Mr French said.
“Such data is distorted by any number of factors peculiar to the individual fund and is not suitable for the calculation of performance figures. In particular, many investors are conservative by nature and they often prefer higher weightings of lower risk assets.”
In a recent blog post, SuperConcepts executive manager of SMSF technical and private wealth Graeme Colley also pointed to the performance statistics as misleading, saying the ATO data used by the Productivity Commission could not be used to make an “apples for apples” comparison.
“It is recognised that comparing costs of running SMSFs needs to be made more transparent so that each type of fund can be accurately compared,” Mr Colley said.
“The comparison issue is ongoing, but the ATO statistics for SMSF recognise that it is not possible to compare APRA-based funds with SMSFs.”
Mr Colley said the data around underperformance of SMSFs with a balance of under $500,000 was particularly deceptive, as only a very small minority of funds fell into this category.
“The report from the commission states that SMSFs with balances of less than $500,000 produce lower average returns. It would have been useful to recognise that the average balance of an SMSF, usually with one or two members, is about $1.223 million,” he said.
“ATO statistics say that, in total, there are only about 8 per cent of funds which have balances below $500,000.”
[quote=Retrogressive Metempsychosis S]
Are you really as ignorant as you sound? The ‘loopholes’ were closed down with the Accountant’s exemption in 2016, and they now need to also be licensed etc like any FP out there.
Before you hysterically fly off the handle with nonsensical erroneous drivel in public forums, and make us all seem like the same pox-affected, cracked-cranium, less than neanderthal low intelligence quotient scoring drama queen, please, first just Google whatever subject of ‘outrage’ you have. [/quote]
Plenty of Accountants still hiding behind execution only advice in establishing SMSF’s for clients. A lot of cowboys in this space and its about time ASIC had a good look at it.
And $1,500 for accounting, auditing and supervisory levy?!?!? The asic levy is alone is $518 for new funds. What planet is David French on!
[quote=Anonymous]The real issue with SMSF’s is that the loophole that exists for Accountants to give advice in the area needs to be shut down![/quote][quote=Anonymous]The real issue with SMSF’s is that the loophole that exists for Accountants to give advice in the area needs to be shut down![/quote]
Are you really as ignorant as you sound? The ‘loopholes’ were closed down with the Accountant’s exemption in 2016, and they now need to also be licensed etc like any FP out there.
Before you hysterically fly off the handle with nonsensical erroneous drivel in public forums, and make us all seem like the same pox-affected, cracked-cranium, less than neanderthal low intelligence quotient scoring drama queen, please, first just Google whatever subject of ‘outrage’ you have.
Ha ASIC, can a Financial Planner use your figures and rely on them when providing personal financial advice? Will your figures be considered compliant and reliable?
Imagine a Financial Adviser manipulating investment performance figures and Fees / costs in their SoA to clients = Lifetime ban from Financial Advice from ASIC.
Yet the same ASIC seem to think it is fine to push their left wing, pro Industry Funds / Anti SMSF agenda with manipulated performance and cost figures.
Really truely insane behaviour from a regulator absolutely smashed for its performance at the Royal Commission and struggling to find any sense of reality.
Only 8% with balances below $500,000, that surprises me given the stampede into SMSF’s over the years.
If that’s accurate, it still represents thousands of funds. Also the average balance of $1.2 + million is a bit surprising as well but I suppose there are a lot of high net worth individuals running their funds.
Never ever again will I trust anything ASIC says or does. They have irreparably destroyed their own credibility with outright lies and misinformation for far too long.
My husband and I run our own SMSF. I figure about 2 hrs a year getting paperwork together for the accountant, and maybe another 2 hrs spread throughout the year keeping an eye on cash flow (we are in pension mode). Accounting and auditing, less than $2,000.
Hmmm. ASIC guilty of incorrect fee disclosure?
The real issue with SMSF’s is that the loophole that exists for Accountants to give advice in the area needs to be shut down!