POWERED BY MOMENTUM MEDIA
SMSFs accessing wholesale products subject to tests
Self-managed super funds (SMSF) will now have to adhere to the same eligibility tests as everyone else when determining whether an investor is a wholesale client or not, a law firm said.
It comes as the Australian Securities and Investments Commission (ASIC) recently announced it will relax its hold on SMSFs investing in wholesale products and make it easier to meet the eligibility test.
Townsend Lawyers said SMSFs will either have to meet one of six tests as laid out in one section of the Corporations Act 2001, or all of the tests as laid out in another section.
Commenting on ASIC's change of mind, Townsends principal Peter Townsend said: "It is somewhat curious that at the same time as ‘vested interests' proclaim that SMSFs are investing in dangerous products and should have their activities curtailed (which translates as: only being able to invest with those same vested interests), ASIC is choosing to give SMSFs access to wholesale investments, which don't necessarily have the same suite of protections as there might be for retail investments."
The tests include making sure the product price is over $500,000, product/service is used in connection with a business, the person has assets of more than $2.5 million and income of more than $250,000 for the last two years, or the person is a professional investor.
Alternatively, SMSFs will have to meet tests in section 761GA, namely that their financial adviser is licensed, the product is not super, insurance or RSA, the product is not used in connection with a business, the adviser tells the client they are satisfied the client is experienced in the products, and the client agrees to this in writing.
Recommended for you
The impact of identity theft and its threat to superannuation savings were highlighted in a case that went before the Federal Court at the end of 2023.
A recent NSW Supreme Court decision is an important reminder that while super funds may be subject to restrictive superannuation and tax laws, in essence they are still a trust and subject to equitable and common law claims, says a legal expert.
New research from the University of Adelaide has found SMSFs outperformed APRA funds by more than 4 per cent in 2021–22.
The SMSF Association has made a number of policy recommendations for the superannuation sector in its pre-budget submission to the government.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.56 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.06 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.81 3 y p.a(%)
