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ASFA points to consumer protection ‘gaps’

The Association of Superannuation Funds of Australia has identified gaps in the consumer protection system for SMSF investors, following the collapse of Charterhill Group.

Responding to a request for comment from ifa regarding the collapsed SMSF property firm Charterhill – first reported by ifa sister title SMSF Adviser – ASFA chief executive Pauline Vamos said broadly that trustees “must be wary”.

“There are some gaps in the consumer protection framework for SMSFs and investors must be wary as a result,” Ms Vamos said. “The law assumes that SMSF trustees are sophisticated and knowledgeable investors and, as such, are able to look after themselves.”

O’Loughlin’s Lawyers, representing at least 15 Charterhill clients, told SMSF Adviser that many of these clients are ‘mum and dad’ investors.

“The average creditor that we are seeing is between $80,000 to $120,000,” O’Loughlin’s Lawyers partner Kym Ryder said.

Ms Vamos said that when looking at any investment, including property, it is wise to get advice from a licensed financial adviser.

“That way, there is some protection for trustees of SMSFs in the form of oversight of the licensee by ASIC, as well as access to the [Financial Ombudsman Service],” she said.