July 1 will end the "amateur" SMSF era
Monday, 21 March 2016 1:02pm

New entry and licensing requirements for SMSF auditors and accountants from July 1 will likely result in many funds being wound up, according to industry consultant John Wiseman.

Wiseman noted that, as at December 2015, SMSFs represented 30% of the $2 trillion superannuation sector and 550,000 members. Describing the idea of amateur do-it-yourself investing as "fanciful," he added that many investors are dependent on low-cost discount SMSF establishment and administration services.

"I can only see an ocean of trouble for those that have elected for the cheap offering over professional qualified advice that is provided by specialist financial planners," he said.

He said that many SMSF accountants still haven't applied for their Australian financial services licence, which will make continuing to provide SMSF advice after July 1 increasingly difficult.

Coupled with the higher entry requirements for SMSF auditors and higher audit fees coming into effect at the same time, and Wiseman predicts many SMSF trustees will re-evaluate whether the self-managed model is as cost-effective as they thought.

"The era of the amateur DIY SMSF is rapidly coming to a close as the sheer size of SMSFs as a percentage of Australia's pool of retirement savings demanded a professional approach to the provision of advice and related services," he said.

"The winners in the new era will be specialist financial planners and professional accounting practices that have reengineered their businesses and service offerings. But in the end, the real winners will be the Australian consumers and national economy."

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