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Disaster waiting to happen for SMSFs
The lack of education and professional requirements for self-managed superannuation fund (SMSF) trustees is a disaster waiting to happen, an industry consultant believes.
JWW Consulting principal, John Wiseman, said it was incomprehensible that current and potential future trustees were not required to complete appropriate academic courses and maintain an ongoing regime of professional development.
"Trustees should be required to have a minimum level of education to undertake an SMSF and both the government and industry should be concerned by this lack of financial literacy and competency," Wiseman said.
"Investing in shares or buying/selling property inside SMSF frameworks is simply not an undertaking for the amateur/unqualified practitioner as the taxation implications and adverse impact on retirement nest eggs can quite literally be catastrophic when mistakes are made.
"I liken the current SMSF situation as only requiring an unlicensed car driver to undertake a course to obtain a licence only if they are involved in a road accident."
Wiseman noted it would be the spouse, family members, disabled/ financially dependent children, and business partners who could be the casualties.
"All who put their faith, financial wellbeing and prospects for a comfortable retirement in the hands of an individual and system that failed them abysmally," he said.
"To have these responsibilities in the hands of someone who is not competent and academically qualified is a disaster waiting to happen and in the end the only winners will the legal fraternity as these situations will invariably end up in the courts."
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It's astonishing the amount of SMSF money invested in cash or TDs. That in itself is confirmation of amateur/unqualified practitioners wanting to take control of their own financial future.