New education standards should include SMSF trustees
The government’s proposed adviser education standards should also apply to SMSF trustees, as some of them lack financial literacy and competency, argues one industry consultant and former financial planner.
In a statement, John Wiseman of JWW Consulting said while he welcomes the new changes to adviser education, there needs to be similar and compulsory requirements for SMSF trustees.
With nearly 30 per cent of Australia’s $2.1 trillion of superannuation funds in SMSFs, it is “incomprehensible” that current and potential future trustees are not required to complete appropriate academic courses, he said.
“Trustees should be required to have a minimum level of education to undertake an SMSF, and both the government and industry should be concerned by this lack of financial literacy and competency,” Mr Wiseman said.
“Investing in shares or buying/selling property inside SMSF frameworks is simply not an undertaking for the amateur/unqualified practitioner, as the tax implications and adverse impact on retirement nest eggs can be quite literally catastrophic when mistakes are made.”
Mr Wiseman said in many cases, penalties imposed on non-compliant trustees are “education directive” and order trustees to undertake an education course at their own expense.
“I liken the current SMSF situation as requiring an unlicensed car driver to undertake a course to obtain a licence only if they are involved in a road accident,” he said.
“Regrettably, the real-life casualties when these ‘financial accidents’ occur are invariably the spouse, family members, disabled/financially dependent children and business partners.”
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