Super Fees in the Firing Line
15 February 2016 I Anthony Keane, The Advertiser, page 37 (This article also appeared in The Courier Mail, The Daily Telegraph and the Herald-Sun)
The rules of running a self managed super fund are set to change soon and some say they will increase the cost of accounting advice.
Licensing changes come into force on July 1 and Adelaide based financial licensing firm Rise Standards says higher compliance cost are likely to be passed on to clients.
Rise managing director Guy Thompson says from July, accountants providing SMSF advice will no longer have an exemption from corporations regulations, and if they want to continue advising the more than one million Australians with an SMSF they will need to be licensed or appointed as an authorised representative.
“Investors can expect to pay more for professional services related to the establishment and ongoing management of a self-managed superannuation fund once the new industry regulations kick in,” Thompson says.
“It could be minimal or as much as 20 per cent to cover the additional resources required to meet the new industry standards. The new licensing regime should usher in higher quality advice,” he says.
SMSF Association managing director Andrea Slattery say many SMSF advisers are already licensed or have known about the rule change for years.
“It shouldn’t mean there’s an extra cost to the market,” she says. “For many of the specialists and experts in SMSFs, it’s just business as usual and the market will drive the pricing.”
SMSFs already have the lowest fees in Australia’s $2 trillion superannuation sector, at about 1 per cent of assets per fund.
For a two-member SMSF that’s 0.5 per cent per member, for industry funds and more for retail funds.
SMSFs hold about $576 billion or 29 per cent of all super assets, recent Australian Taxation Office data shows.
About 36,000 new SMSFs are established each year, and the median age of SMSF members fell below 50 for the first time last year.
The industry will be the centre of attention this week at the 2016 SMSF Association annual conference in Adelaide, featuring financial heavyweights such as Tax Commissioner Chris Jordan, ASIC Commissioner Greg Tanzer and Treasurer Scott Morrison.
“For the first time in history a Treasurer is going to address this community,” Slattery says.
“It shows the importance the Treasurer and the Prime Minister are placing on it.”