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Dr. Mark Sinclair
Dr. Mark Sinclair, Mentor Education

Lawyers say investors being pressured into low cost SMSFs

14 January 2014

Owen Hodge Lawyers have labelled the advice that some accountants and financial planners are providing as dubious while they seek to capitalise on the SMSF market.

Managing partner at Owen Hodge Lawyers Rolf Howard has said that, “SMSF investors need a minimum of $500,000 either in their super fund or available through equity in shares or property to make the creation of an SMSF worthwhile and those who do not have a minimum of $500,000 to invest may find it very difficult to justify the fund’s set-up and ongoing maintenance costs.” Hodge added that, “some practitioners who offer financial advice don’t tell investors this as their focus is on seeking ways to increase their revenue streams to the financial detriment of their clients and unfortunately investors are being coerced into creating SMSFs with as little as $250,000 to invest.”

While it is imperative to have an investment plan prior to establishing an SMSF, Hodge emphasised that it was also important to discuss the various investment options with an accountant.

Hodge warned that a significant level was required to effectively run a fund and many struggle to separate the fund’s activities from other investment expenses, including personal and business.

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