Knowledge gap for SMSF trustees

Accountancy body CPA Australia has identified a substantial knowledge gap among those involved in self-managed superannuation funds (SMSFs), with claims that around a third do not recognise themselves as trustees.

CPA Australia’s research also suggests that individuals involved in SMSFs who do recognise their status as trustees don’t necessarily have a good understanding of the obligations which flow from that status.

CPA Australia’s superannuation policy adviser Michael Davison said the research also showed that one-third of SMSF owners did not have or did not know their fund’s investment strategy, despite this being one of the key responsibilities of an SMSF trustee.

“Running an SMSF is serious business and there are a number of obligations SMSF trustees must meet under superannuation law,” he said. “It is important they are fully aware of these obligations.”

Davison said it was not that trustees were not making decisions or actively running their funds, but that CPA Australia’s research indicated they were not fully aware of their legal obligations or level of responsibility.

He said the aim of the research was to provide a snapshot of the SMSF market, identify reasons why SMSFs are established, and the advice and services trustees sought from accountants and planners.

Davison said interviews were carried out with 300 CPA public practitioners and about 200 financial planners, with interviews being held separately with around 100 random individuals and business owners who had an SMSF.

The research showed that most CPA public practitioners and three-quarters of financial planners surveyed had clients with an SMSF, but that only about 40 per cent of the public practitioners directly service their clients’ funds compared to 75 per cent of planners.

The research also found that the majority of SMSFs serviced ranged in size from $120,000 to $450,000.