Financial Standard Comments - SPAA: Last resort compensation scheme needed

Comment by Leo Menkens ()

Leo Menkens () — Wed, 23 May 2012 15:11:54 +1000

There is adequate legislation governing prudent management of investments. The regulator needs to be more diligent.
As for SMSFs, they are called self managed so the trustees are responsible for their decisions. If they rely on external advisce that proves negligent they can get compensation through legal means.
Having sinking funds to provide compensation removes the responsibility and accountability of everyone concerned. It ultimately leads to mediocrity, complacency and inefficiency.

Reply to article

For original story, Click Here.

Comment by Fred ()

Fred () — Wed, 23 May 2012 16:39:10 +1000

No one in the regulated funds area disagrees, provided it is fully funded by SMSFs. They cannot have it both ways, compensation without contribution. Regulated funds, not product providers, paid for the Trio losses. SMSFs make their own choices, and should live with them. SPAA's solution has massive moral hazard for the industry.

Reply to article

For original story, Click Here.

Comment by RF. ()

RF. () — Wed, 23 May 2012 20:12:25 +1000

I agree with Fred. SMSF trustees cannot be given the opportunity to put their hand out without the SMSF industry paying for their risk decisions.

Reply to article

For original story, Click Here.

Comment by Rip Off ()

Rip Off () — Thu, 24 May 2012 11:09:07 +1000

Just another money grab.
My SMSF, that is me, has invested in infrastructure and bank shares and cash. I have no fear that these will be ripped off. These investments may not do well, but they won't end up in the Bahamas or Cook islands, and therefore why should I be compelled to contribute to an insurance scheme to compensate me for risks I do not take.

Reply to article

For original story, Click Here.