The development of the self-managed superannuation fund (SMSF) sector should not come at the expense of the wider superannuation system, according to Super IQ chief executive Andrew Bloore, given that only 4 per cent of the population uses SMSFs.
Bloore, who was speaking at an Australian Center for Financial Services briefing yesterday, said that while SMSFs had attracted large numbers of members and funds, the wider population and the more numerous users of superannuation needed to be kept in mind when making changes to the system.
“There are a ludicrous number of SMSFs in Australia and the development of that sector should not come at the expense of other sectors,” Bloore said.
“We need to remind people that SMSFs make up 4 per cent of the super population and we need to keep the wider population in mind.”
Bloore said the SMSF sector has been a driver of new ideas and technology but still remained heavily fragmented, with more than 17,000 accounting firms offering SMSF services.
However he said that for the wider superannuation sector to develop equally across the board it might be necessary to restrict superannuation fund behaviour.
“We may need to curb some behaviour which some sectors of the market engage in – for the benefit of all superannuation fund members,” Bloore said.
He said SMSFs also needed to start being regarded as administration systems that are separate from the investments held within them.
“Administration is one part of what an SMSF is, and separating them from investments allows funds members to interact with investments in other ways such as using the ASX MFund or pooled investments,” he said.
“New technological developments should aim for an SMSF sector that is not controlled by members but directed by members, which in turn creates a way for the sector to interact with other super segments.”
