Industry Funds Management chair Garry Weaven has called for stricter compliance rules for self-managed superannuation funds (SMSF), arguing they largely escape the oversight of a regulator.
Weaven said once the Future of Financial Advice (FOFA) reforms were implemented, the industry super sector would seek to address the compliance rules for SMSFs.
"I tell you one thing: once we get this commission thing [FOFA] out of the way, we are coming after self-managed super, not because we want to burden it in any way, but we want them to be on the same footing as industry funds," he said yesterday.
"For many, many years there was no police; it is still not policed by APRA (Australian Prudential Regulation Authority) at all."
He rejected the suggestion SMSFs were appropriately monitored by the Australian Taxation Office.
"There [are] 440,000 schemes and you know how much policing that is? APRA funds get policed at least one week out of the 52 a year; they have one every 52 years," he said.
"It initially started out as a tax rort to avoid the rules around super. Now it has been tightened up, but that was the case for many years.
"[An SMSF] is still very much a creature of the commission-driven system and of the way accountants use the system and how financial planners work."
Weaven was supported by Australian Institute of Superannuation Trustees chief executive Fiona Reynolds.
"To say that it is self-managed is often a bit of a misnomer. People are not managing their own superannuation funds; it is really that they have been put there by accountants," Reynolds said.
"I went to my accountant three years ago to do my tax and I couldn't believe how blatant this was.
"He said: 'I can set you up with this great self-managed fund.' And I said: 'Why would I want to do that?' And he said: 'Well, it is not going to do you any harm and it will do me some good.'"
