SMSFs ‘fraught with risk’: CareSuper

Industry fund CareSuper has said its direct investment option was created to stop members from moving to self-managed super funds, claiming the SMSF sector is “fraught with risk”.

CareSuper CEO Julie Lander said many investors have “little understanding” of the ongoing compliance costs associated with SMSFs, as well as the “severe fines” they could face if they fail to comply with “a raft of complex regulatory requirements”.

The high costs associated with SMSFs make them “overwhelming” and “fraught with risk”, which could also create greater financial pressures for retirees in later life, she added.

“Many people don’t consider the ongoing work involved in managing an SMSF, including annual audits and tax returns, or the cost involved in winding up such an arrangement,” she said.

Along with CareSuper, AustralianSuper and legalsuper also offer direct investment options. In addition, HOSTPLUS recently announced its intention to launch itself as a pooled superannuation trust to allow SMSFs to invest in its investment options.