SMSF closures drop 75% in 2014BY LAURA MILLAN | WEDNESDAY, 10 SEP 2014 12:25PMThe number of self-managed super funds (SMSFs) that were wound up in financial year 2014 dropped by 75%, according to the latest figures from the Australian Taxation Office (ATO). Related News |
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Once again - too much is being read into early statistics. The lodgement of SMSFs for FY2014 has just commenced. Expect a significant (upward) revision of the wind up statistics of the coming reporting periods
Perhaps more attention should have been paid to this statement taken directly from the ATO page linked in the article: "Quarterly establishments and wind-ups for recent quarters may be understated, because there is often a time lag between when this event occurs and when the ATO receives notification from the SMSF."
These statistics are useless and create incorrect headlines and articles. As indicated by other commentators, the ATO significantly revises these statistics which no one picks up on and goes by without comment. For example, in response to the June 2012 statistics, SPAA made the following comments in a media release:
"in 2012 there was a sharp decline in the number of fund windups, with only 994 wind-ups compared with 5108 in 2011 and 14,699 in 2010. These factors, together with increases in average SMSF balances, suggest reports that SMSFs are being oversold to unsuitable clients are being overstated."
However, 12 months later, the ATO released the June 2013 statistics and in there is a revision to the June 2012 windups, which had been revised up from 994 windups to a 6,178 windups. This is a very different statistic and does not support the market commentary made at the time.
The key message here is that the quarterly statistics are useless.