The SMSF Professionals’ Association of Australia (SPAA) will introduce best practice guidelines on the complex area of limited recourse borrowing arrangements (LRBAs) to assist lenders and advisers. Speaking at the SPAA National Conference on Wed 19.2.2014, CEO Andrea Slattery, said SPAA is working closely with a wide range of stakeholders on LRBAs and will be able to provide Government and regulators with information on what is really happening in this space to better target their policy settings.

SPAA notes that about 90% of all current LRBAs represent less than 1% of all SMSF assets. In addition, APRA statistics show that the average loan value is $311,000, the LVR for a LRBA is typically between 60-75%, and the average asset value underlying the loan is about $450,000. “This does not paint a picture of irresponsibility”, Mrs Slattery said. SPAA’s priorities for 2014 will focus on the Murray Financial Systems Inquiry, tax inquiry and the pension inquiry that includes the ageing population and retirement debate. Mrs Slattery said SPAA will also be providing guidance on how SMSF capital could be unlocked and used more efficiently for new markets such as infrastructure and bonds.

Source: SPAA media release, 19 February 2014

[LTN 33, 19/2/14]