ISA 'deliberately misled' Murray Inquiry
Industry Super Australia has been accused of launching a "self-serving" attack on SMSFs and hiding commercial concerns “behind the veil of protecting members’ interests" in its submission to the FSI.
In the submission, published last week, ISA said that data indicates most SMSFs are poorly diversified, with approximately two thirds having an “overwhelming” majority of assets in either high-risk assets or low-risk assets.
According to Reece Agland, manager of superannuation products and services at Superannuation Australia, a wholly-owned subsidiary of "not-for-profit" lobby group Taxpayers Australia, ISA “deliberately misled” the FSI about diversification in SMSF investment.
“Once more we see the ISA attacking SMSFs because it is concerned at the flow out of the industry fund sector into the self-managed sector,” said Mr Agland.
“The ISA makes out the fact that some SMSFs are largely invested in safe investments as a bad thing, as if all superannuation funds must have the same investment strategy,” he added.
“If you are in retirement phase or near retirement phase, as many SMSF members are, it makes sense to invest in low-risk investments. This is the optimal investment strategy to protect your income. This is a good thing, not a bad thing,” he said.
Taxpayers Australia also stated that ISA fails to mention its funds also now allow people more choice in their investment options, and include both high-risk, high-return options and low-risk, low-return options.
“It is hypocritical of the ISA to complain that SMSFs can invest in either high-risk or low-risk investments when their member funds allow the same risk taking within an industry fund,” Mr Agland said.
“Should industry funds be banned from making such options if they are such a risk? Of course not. The investment strategy needs to better match the needs of each individual member and this can best be done in a SMSF,” he added.
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