Prof. Deborah Ralston
There was an urgent need for better data, not only for the self-managed super fund (SMSF) sector but right across the superannuation industry, SMSF Association Chair Professor Deborah Ralston has told the Association’s 2019 National Conference in Melbourne.
Ralston told the more than 1600 delegates attending the two-and-half day forum that the Productivity Commission’s initial draft report, released in May last year, suggested that SMSFs were not cost-effective compared with APRA-regulated super funds below a balance of $1 million.
“This conclusion drew attention to the paucity of accurate cross-sectoral superannuation data, and the resultant difficulties in making comparisons between SMSFs and APRA-regulated funds. With assistance from our platform provider partners, the Association was able to successfully argue that the data and methodology used by the Commission to make these comparisons were flawed.
“As a consequence, the Commission’s final report, published in January, thankfully showed that it listened to us and other SMSF experts and revised their cost-effective figure for SMSFs to $500,000.
“Although we believe better data could see this figure fall lower, it’s a vast improvement on where the Commission started from and makes it imperative that the industry has access to improved data to ensure more informed decision-making.”
Ralston also drew attention to the importance of having both excellent professional advice and well-informed trustees.
“It has become increasingly clear that to preserve the integrity of the sector we need not only to have outstanding professional advice, but also ensure that trustees are well aware of their responsibilities. ASIC and the Productivity Commission strongly pointed to the importance of financially literate and knowledgeable SMSF trustees.
“We need to work with professional members to assist in building a trustee education network. Bringing unadvised trustees into our skilled network of professionals and ensuring that all trustees are well informed is essential. I don’t need to tell you about the critics who wait to see poor practice in SMSFs.”
