SPAA backs ASIC warning on property advice by unlicensed real estate agents.

The SMSF Professionals’ Association of Australian (SPAA) fully supports the ASIC statement issued on Wednesday that strongly warns the real estate industry about agents recommending investors to use an SMSF to invest in property.

SPAA CEO Andrea Slattery says: “The ASIC warning is both timely and needed in light of the enormous media attention that has been given to this issue in recent months.

“From SPAA’s perspective, it’s been our constant stance on SMSFs investing in property that there are technical dangers, and as such we have always recommended that trustees get professional licensed advice, either from a professional SMSF Advisor who holds a licence or is an authorised representative of a licensee.

“We took that position a year ago in a detailed technical bulletin to all our members warning of the risks of property investment, and it remains our position today.”

She says property is an investment option for an SMSF, but, like any investment, it must be suited to the fund and take into consideration the members’ circumstances.

“In relation to property, there may be an interest in this asset class now because, in a low interest environment, people are looking for investment opportunities with higher yields than cash or bonds, and while there are still fears held about equities.

“It’s exactly because of this heightened interest in property that the regulator should be on the front foot to warn the real estate industry that its members must use licensed advice when recommending setting up an SMSF or recommending an SMSF acquires a property.

“ASIC is the ‘consumer awareness’ regulator and gained new powers on 1 July 2013 to target inappropriate marketing and spruiking within the Financial Services sector.

In its statement, ASIC said it was concerned that with the increased popularity of SMSFs and property investment, adding that real estate agents may not realise they are providing financial product advice and need an Australian financial services (AFS) licence when making recommendations or statements of opinion to a person to use an SMSF to invest in property.

ASIC has written to the REIA, the state and territory real estate institutes and property investment associations (real estate bodies), setting out its concerns and asking the real estate bodies to communicate these to its members.

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Andrea Slattery

The SMSF Professionals’ Association of Australian (SPAA) wants the Coalition Government to increase the concessional contribution cap above the current $35,000 limit to help meet the aspirations of all Australians wanting to be self-sufficient in retirement.

SPAA CEO Andrea Slattery says: “The recent increase from $25,000 to $35,000 was welcome, but SPAA strongly believes the cap needs to be higher to allow superannuation savers to be able to make greater concessional contributions.

“This is especially relevant to women and those with broken work patterns as a higher concessional cap will give them the chance to contribute more to superannuation at a time when they can afford it most.

“There is now an opportunity for the new Coalition Government to take on the challenge of increasing the cap and providing an opportunity for more Australians to establish a self-sufficient and dignified retirement for themselves.”

As the system now stands, in 2013-14 people aged 60 and over will be able to make up to $35,000 of concessional contributions to their superannuation, and from 1 July 2014, people aged 50 and over will be able to contribute $35,000 as well.

This decision was announced by the former Government on 5 April 2013 and became legislation on 30 May 2013.

Mrs Slattery says: “SPAA had been advocating for a higher contribution cap than the $25,000 limit, especially for those over 50, since the contribution cap was cut in 2009. SPAA coordinated an industry letter and made submissions in 2011 that supported the introduction of a $35,000 cap.

“We view the tax concessions for contributions as the essential key to the policy design of the Australian superannuation system that encourages Australians to save a reasonable amount for a sustainable retirement.  The concessionally taxed contributions to superannuation give people the incentive they need to forgo current spending in favor for saving for retirement.”

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Andrea Slattery

The high priority accorded superannuation with the announcement of Labor’s shadow ministry has been welcomed by the SMSF Professionals’ Association of Australian (SPAA).

SPAA CEO Andrea Slattery says: “Labor has clearly indicated with this shadow ministry that superannuation will be a key policy area. We acknowledge this and look forward to working with the Opposition.

“In particular, the appointment of Bernie Ripoll as Shadow Minister for Financial Services and Superannuation gives our sector a spokesperson that understands the portfolio, being well regarded for his previous work as Parliamentary Secretary to the Treasurer and his parliamentary committee work.

“As the leading representatives of the $500 billion SMSF sector, SPAA looks forward to closely working with Mr Ripoll to further improve the integrity and efficiency of the superannuation sector and improve the adequacy of Australian’s retirement savings, with a strong focus on working to ensure there is bipartisan support for Australia’s retirement incomes policy.

Mrs Slattery says SPAA is also heartened by the fact the Opposition Leader, Bill Shorten, and Shadow Treasurer, Chris Bowen, both have significant experience in the superannuation and financial services portfolios and will bring a keen understanding of the issues to their new roles.

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Andrea Slattery

The SMSF Professionals’ Association of Australian (SPAA) welcomed the release of a consultation paper by ASIC on SMSF disclosure requirements and costs.

SPAA CEO Andrea Slattery said SPAA said: “The announcement by ASIC is consistent with SPAA’s objective as the peak body for the SMSF sector in Australia.

“SPAA is an advocate for the highest professional standards and competence to ensure SMSF trustees always receive the best possible advice.

“SPAA represents leading professionals providing a range of services across various disciplines in the SMSF sector. As has been noted recently by ASIC Commissioner Tanzer, SPAA’s  members can play an important gatekeeping role in the sector and can be a critical entry point on the establishment of an SMSF and on advice to trustees of SMSFs.

“It’s important that investors can choose how to invest their retirement savings but equally SPAA recognises that SMSFs are not suitable for all members.

“Any consideration of competency and quality of advice and level of disclosure by those service providers to the SMSF sector will further improve the health of a sector that is continuing in steady growth and performance.”

SPAA will be engaging with ASIC on this important consultation process.

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Andrea Slattery

The SMSF Professionals’ Association of Australian (SPAA) is looking forward to working closely with the Coalition Government and is heartened by its pre-election promise of “no unexpected detrimental changes to superannuation”.

SPAA CEO Andrea Slattery says: “The SMSF sector and the Coalition’s view of the world have much in common. We believe this augers well for the future strength and stability of the superannuation sector. SMSF’s alone accounts for $500 billion in assets and include around one million participants.”

“SMSFs are all about choice, self-sufficiency and individual responsibility for one’s retirement. As an industry we are concerned with making the sector more efficient with less red tape.”

“We welcome statements by Prime Minister elect Tony Abbott that ‘Australia is open for business’. We believe the SMSF sector will warmly welcome these comments and that they send a strong signal of intent when it comes to expressing the priorities of the new Government”.

“We are confident that the Coalition is acutely aware of the dangers of continuing changes to the superannuation rules. They act as a disincentive for people to save for retirement, and, as a consequence, we welcomed the promises made by both parties to stop changing superannuation rules detrimentally as a step in the right direction to achieving bipartisan support for a sustainable and stable superannuation system.

“We strongly believe that as far as possible, superannuation should be above short-term budgetary political pressures as it is a lifetime commitment that has the goal of reducing the long-term costs to government and allowing people to retire with dignity.”

“SPAA welcomed the Coalition’s commitment to not introduce any negative changes to the system, and we will continue to advocate strongly those measures we believe will have a positive effect,” said Ms Slattery.

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