News

Establishments peak during same quarter annually

By Darin Tyson-Chan

CoreData research conducted earlier this year into the sector has shown SMSF establishments are more likely to take place at one particular time every year.

Specifically, the study revealed establishments have peaked during the September quarter consistently every year between 2017 and 2021.

“What you actually see is the September quarter was always high and that September quarter activity obviously was the result of people seeing their accountants or advisers probably in June,” CoreData senior executive Grahame Evans told attendees at the selfmanagedsuper CoreData SMSF Service Provider Awards 2022 in Sydney.

Evans pointed out this finding has significance for all stakeholders in the sector.

“{Practitioners and service providers must ask themselves] are you planned, are you organised, are you managing around that because it’s an important one for providers in the room,” he suggested.

With regard to overall SMSF activity, he recognised the number of establishments has suffered a decline, but at the same time fund wind-ups have also reduced.

“[This] is actually pointing to a fact that we are in a situation where people are not quite certain what’s actually going to happen in the world and I think we’d all be in that same boat,” he said.

Further, the study found advisers have differing views and attitudes compared with trustees with reference to issues like the direction of the economy.

“I’m going to make a big observation here and partially it’s to do with, I think, the availability of information to accountants and advisers compared to the availability of information to trustees,” Evans noted.

“I think there’s a time lag and I think [we can] see a lag between the way [people] are thinking [about] the market and what they are actually doing.”

He also acknowledged the growth in the professional relationships between SMSF trustees and service providers.

“Being both a user and advocate for many, many years, it’s only going to go one place and that’s actually up,” he noted.

The survey was conducted online between 26 July and 5 September this year and garnered responses from 240 financial advisers and accountants, and 925 trustees.

Super system should be for one thing only

By Darin Tyson-Chan

Assistant Treasurer and Financial Services Minister Stephen Jones has confirmed the government is committed to ensuring the current superannuation system is used for the purpose of providing sufficient retirement savings for the majority of Australians and nothing else.

In making the statement, Jones stipulated the government was not against having people contribute as much as they possible can to their superannuation funds when expressing concerns over certain SMSFs with very large member balances.

“We’re not saying to people you shouldn’t put as much money away in retirement as possible. We’re not saying you should not bequest a generous amount of money for your kids or your grandkids or your favourite animal shelter or whatever it is. We’re not saying that,” he affirmed during a speech at the recent AFR Super & Wealth Summit 2022.

“We’re just asking the question: what is the role of the superannuation system in assisting you doing it?

“If you want to leave a huge estate to your kids, great. And if you want to have an enormous balance to support you in your retirement, great. We believe in selfsupport, we believe people looking after their retirement affairs, but the question has to be asked: how much of that is the role of the superannuation system and how much should the taxation system support you in meeting those objectives?”

Jones would not specify what the government considered a sufficient superannuation asset balance before tax concessions would cease to be available and assured the audience it was not looking to be antagonistic with any review of the system.

“I actually don’t see it as picking a fight. We’re not starting from the proposition of where is a fight to be had and let’s go and Stephen Jones

have it. We’re starting from the proposition about what is right,” he noted.

“We haven’t got a set of crosshairs, but there are some distortions in the system that just don’t look right and they’re costing the budget significant amounts of money.”

During the same session, he revealed the government is intending to reassess the current tax concessions embedded in the retirement savings system after concerns over 32 SMSFs with member balances over $100 million.