Sent: 07-07-2009 11:11:02
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Trouble Ahead for Self Managed Funds?
You might have heard about the Review into the Governance, Efficiency and Structure and Operation of Australia's Superannuation System (thankfully more commonly known as the Cooper Review because it is being headed by Mr Jeremy Cooper who was formerly an ASIC Deputy Commissioner).
A report prepared for members of the Cooper Review which was made available under Freedom of Information laws apparently says some rather unflattering things about Self Managed Super Funds.
Some media commentators have expressed ominous concern about the views found in this report and about the noticeable lack of knowledge about Self Managed Super Funds amongst the Cooper Review committee's members. Some have called for a small fund 'expert' to be appointed to the Cooper Review to help represent that segment of the super industry. (Does such an animal exist?)
Do these commentators have a point or are their concerns a little misplaced?
It is certainly true that most of the people appointed to the Cooper Review appear to lack knowledge about Self Managed Funds.
But does this mean that the committee will seek to be transparently biased towards their own interests against SMSFs which are the biggest competitive threat to retail super funds (both for profit and not-for-profit)?
My own personal view is that the concerns are a little overstated for two reasons. Firstly only a short-sighted drongo would think they could deliver blatant booterism in a government committee report, think no one would notice and expect to succeed. (Even Humphrey Appleby's classic presentation of three policy options, two of which are absurd, wouldn't work. Further his use of old statistics to justify over-reach on conclusions will also fail.)
Secondly, and perhaps more importantly, Self Managed Funds are now too large a market to be treated brutally or ignorantly by government. Some people will only have a vague memory of the various changes made to SMSFs over the years and the furore which respective Ministers had to deal with as a result. 1998 and 2004 are two classic examples.
Only a masochist Minister would fail to learn anything from these experiences.
It's true that SMSF representation at government level is very disparate and often adhoc. Many organizations and activities are very interested in SMSFs - stock brokers, financial planners, bankers, investment managers, accountants, auditors, lawyers, actuaries and so on.
One of the main advantages which SMSFs continue to have is its involvement with the accounting profession. Accountants remain well respected in Canberra.
It remains open to the accountants to press the "nuclear button" if politicians or their policy advisers attempt something which they do not like in relation to their clients. And don't think the politicians about the impact of the "nuclear button".
But having said all this, anyone who knows anything about Government policy development will know that sadly vigilance is a necessity. A few years ago the Howard Government created a line "be alert but not alarmed" about possible terrorist threats. It's a good motto and one that anyone involved with Small Super Fund should take to heart.
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