GFC not the biggest issue for SMSFs
A number of risks are looming large on the radars of SMSF advisers, according to the principal of consultant actuarial firm Rice Warner, Michael Rice.
"The SMSF trustees surveyed identified many risks concerning them, including investment and associated risks, and keeping the value of their savings and investments in line with inflation," he said.
"But their biggest concern, identified by 83 per cent of respondents, was the possible adverse impact of legislative change."
The survey, undertaken by 384 SMSF Professionals' Association of Australia (SPAA) members and initiated by SPAA and Vanguard Australia, sought to identify the financial needs of trustees and review their general concerns about retirement.
Indeed, concern over a changing legislative environment was not surprising to Andrea Slattery, chief executive officer of SPAA.
"This in-depth survey confirms what we have been saying for a long time - that continual change to superannuation and the tax regime around it is undermining our universal system," she said.
"What people want from Government is certainty about the rules governing their retirement savings, and this survey clearly indicates they believe they are not getting this.
"From SPAA's perspective, this survey sends a clear message to all political parties: stop moving the superannuation goalposts to allow people to make long-term plans for their retirement."
Agreeing with Slattery's sentiments, Rice said that the survey had specifically asked trustees whether their retirement plans had been affected by the Government's reduction of contribution caps for pre-tax contributions.
"As a result, many respondents indicated that they will now have to contribute more when there are conflicting financial needs (eg, cost of children's education), while some will have to delay retirement by many years," Rice said.
"But perhaps more interestingly, only 32 per cent say that the Global Financial Crisis (GFC) had impacted on their retirement plans, perhaps reflecting the fact that the average investment performance for the SMSF segment out-performed the average for all APRA (Australian Prudential Regulation Authority) funds for six of the seven financial years to 2011."
"We suggest that those managing an SMSF are more closely aligned to their investments than members of other funds," Rice said.
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