POWERED BY MOMENTUM MEDIA
Expanding CSLR only fair way to share costs: SMSFA
The SMSF Association is “deeply concerned” about the exclusion of managed investment schemes from the compensation scheme of last resort.
Appearing before the Senate Economics Committee, the association said the exclusion was a particular worry for self-managed superannuation fund (SMSF) investors and it would fall to the advice industry to pick up the costs.
Peter Burgess, deputy chief executive, said: “The SMSF sector is deeply concerned that the scheme does not adequately incorporate all market participants, particularly the exclusion of managed investment schemes.
“Over the years, investors have suffered substantial financial losses because of misconduct and subsequent insolvency of managed investment schemes such as Trio.”
Burgess said the failure to broaden the sector could result in advisers being left to pay “disproportionate” costs as the fault would be placed with them.
He said: “For unadvised SMSF investors, if managed investment schemes are not included in the scheme, they won’t have access to a compensation scheme like this. So that is a concern. For those that are advised, it could be the advice sector is called upon to pay a disproportionate cost of the compensation, given the spotlight will be on advisers in terms of allocation of fault.
“We are concerned that without broadening of the funding base to include other sectors like managed investment schemes that the financial advice sector may incur a disproportionate share of the compensation cost at a time when there’s a real focus on the cost advisers are incurring.”
There could then be the indirect cost of advice costs increasing for consumers as a result of advisers being forced to fund the scheme.
“We think broadening the scheme would be a fairer way of sharing the costs,” he concluded.
AUTHOR
Laura Dew
Laura Dew is editor at Super Review. Prior to joining SR, she spent five years working at Investment Week in the UK covering asset and wealth management.
Recommended for you
Governor Bullock took a more hawkish stance on Tuesday, raising concerns over Trump’s escalating tariffs, which sent economists in different directions with their predictions.
Equity Trustees has announced the appointment of Jocelyn Furlan to the Superannuation Limited (ETSL) and HTFS Nominees Pty Ltd (HTFS) boards, which have oversight of one of the companies’ fastest growing trustee services.
Following growing criticism of the superannuation industry’s influence on capital markets and its increasing exposure to private assets, as well as regulators’ concerns about potential risks to financial stability, ASFA has released new research pushing back on these narratives.
A US-based infrastructure specialist has welcomed the $93 billion fund as a cornerstone investor.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Global X GlobalX FANG+ ETF
33.51 3 y p.a(%)
2
Spire Oaktree Opportunities XI Second Close
32.68 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.62 3 y p.a(%)
4
Spire Oaktree Opportunities XI First Close USD
31.36 3 y p.a(%)
5
Fidante Credit Suisse Global Private Equity
29.60 3 y p.a(%)
