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Dr. Mark Sinclair
Dr. Mark Sinclair, Mentor Education

SMSF trustees advice unacceptably poor.

18 November 2013

A recent submission by the Australian Institute of Superannuation Trustees (AIST) and Industry Super Australia (ISA) lodged to ASIC reveals that the advice that SMSF trustees are receiving is  “unacceptably poor”.

The paper outlined that the poor level of advice received by trustees was related to set up and administering of funds and the two organisations emphasised that there was evidence of “too many people with small account balances have established an SMSF and that their costs to earnings ratio are unacceptably high, especially when compared to industry and other not-for-profit funds.”

On the importance of an exist strategy, AIST and ISA said that SMSFs have “highly undiversified investment portfolios,” which results in high risk investment strategies with real property investment being a leading factor” and that “It is important that SMSF trustees develop and maintain an exit strategy.”

The submission paper quoted research by the University of New South Wales and Sydney University of Technology on more than 200,000 SMSFs between 2008 and 2010 and ASIC is expecting to release the conclusions of the paper in early 2014.

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