ASIC has confirmed that it is not proposing to prescribe a mandatory minimum account balance for the establishment of self-managed superannuation fund (SMSFs). Speaking at the SMSF Professionals’ Association of Australia (SPAA) National Conference, ASIC Commissioner Greg Tanzer, said the account balance is just one factor ASIC considers when reviewing advice to set up an SMSF.
From a risk perspective, Mr Tanzer said ASIC is more likely to look at advice to set up a SMSF where the balance is outside a specific range. ASIC has previously suggested that SMSFs with less than $200,000 may not be competitive with other available superannuation options. However, Mr Tanzer noted that a small account balance could still be in the best interests of the client, eg where the investor has a concrete plan to transfer a large business asset into the fund within a specific time frame. Instead, ASIC intends to develop a requirement for clear, detailed disclosure of set up, ongoing and exit costs, and a comparison of these SMSF costs with the cost of remaining in an APRA-regulated super fund. This work will be based on recent research and feedback from stakeholders. It is likely to be completed in the “coming months”, Mr Tanzer said.
[LTN 36, 24/2/14]