The SMSF Association says it is a myth that SMSFs are unregulated.
SMSF Association Head of Policy, Jordan George, said the fact that SMSFs aren’t regulated by APRA creates a “false impression” that they aren’t regulated.
“There are many myths around SMSFs, often being spread due to a lack of knowledge about the sector, and the notion of an unregulated SMSF sector is at the top of this list,” he said.
“As SMSF trustees and their specialist advisors well know, the SMSF sector is rigorously regulated by two key Government agencies: the Australian Taxation Office (ATO), which administers the relevant superannuation laws for SMSFs, and the Australian Securities & Investments Commission (ASIC), which regulates financial services to protect consumers and registers SMSF auditors.”
Mr George said that the ATO has proven to be a “highly effective regulator”.
“The evidence for this is the high compliance rate among SMSFs, with 98 per cent of funds annually meeting their obligations under the superannuation laws.”
He said that the “unregulated or lack of regulation” myth continues, despite the findings of the Super System Review (Cooper Review) and Financial System Inquiry (Murray Inquiry), which both “gave the sector a clean bill of health”.
“Leaving aside Murray’s recommendation to ban LRBAs, neither inquiry found there was any systemic issue threatening the viability of the SMSF sector – further evidence that the regulatory regime is working effectively,” said Mr George.