A- A A+

Coalition "quite like" SMSFs

Staff reporter |  03 December 2013  |  Portfolio

“Like”The Coalition's free market preference is likely to be evident in the way it approaches SMSF regulation. Assistant Treasurer Arthur Sinodinis, talking at a discussion facilitated by the Financial Services Council has said he prefers a “fairly flexible” regulatory regime for SMSFs.


Sinodinis said philosophically, the government "quite likes" self-managed super funds because people take responsibility for their own savings. "The regime that is attached to that has tended to be a bit more light touch than the regime you get around APRA-regulated funds,” he said. “But the other side of that is that people in that situation should not expect that the government necessarily comes to their rescue.

“The politics of this has always been that if things get really hot, the government always comes to the rescue, depending on how much they’re feeling the heat. But philosophically, I would prefer a situation where the regulation remains light touch.”

Sinodinos expressed concerns that borrowing and gearing within SMSFs may fuel a bubble within the property market, although he does not believe that is the case yet. He said the strength in the property market was probably more due to low interest rates.

Meanwhile, a survey of financial advisers by Instreet Investment has found that their clients (mostly SMSF trustees) have a strong interest in overseas shares. Only 11 per cent of advisers reported that their clients had no interest in overseas markets, with the vast majority – 89 per cent – saying their clients are considering investing. Fifty five per cent are conisdering exchange traded funds, 22 per cent managed fund and 11 per cent want to invest directly.

Instreet suggests that this ingterest reflects a belief that the Australian dollar is overvalued. "The emergence of the ETF market, too, has played its role. They are easy to get in and out off and can come with lower fees than a managed fund."

There is interest in US stocks, but European stocks get the most attention. This reflects a view that the depressed valuations will at some point correct.





Similar articles from Portfolio

Be yourself, know thyself

Staff reporter | 12/17/2013

knowSMSF investors should understand their own biases and tendencies if they are to make sound decisions. It is possible for very different people to do well, but self knowledge is key.

Diversifying offshore

Staff reporter | 12/15/2013

OffshoreThe high $A suggests that looking offshore has its attractions. But the fate of Australia's currency is determined by forces larger than the performance of the local economy, making its direction unpredictable. And there are risks in overseas markets.

Is the share market a good play?

Broker reports editor | 11/26/2013

Super funds have reduced their ownership of shares since 2007, and since 2011. That is partly because of the rise of SMSF investors, who are less likely to diversify. How should they be assessing whether the share market is a good option?

Warning: Super is coming under pressure

PSI | 11/24/2013

 PressureThe signs are growing that as government finances come under pressure, super will be targeted. A Grattan Institute report has called for big tax changes. DIY super investors have to plan accordingly.

Look overseas, but with care

PSI | 11/18/2013

Economies Investors who invested overseas have done well over the last year -- and that is with the $A still at historically high levels. The reasons to look offshore remain, but great caution is needed. The economies of the developed world remain under long term pressure and big companies are still reluctant to invest.



Subscribe to the Personal Super Investor weekly email to keep abreast of developments in SMSF law and investment markets. SMSF investors looking to improve investment returns from shares, property, cash or other specialised investments, will find the PSI weekly newsletter an invaluable resource.

Subscribe now »