SMSFs

The gender gap may be closing in SMSF balances (and at a much faster rate than APRA funds), but it’s still a glacial pace. Class modelling shows that an early boost, combined with the magic of compounding, can redress the imbalance.

In a year when Australian equities far outperformed international stocks, APRA-regulated funds felt the brunt more than SMSF trustees, who still favour the double dipped income of franked local dividends.

Transfer Balance Caps, Super Balance Thresholds and the rules overseeing the notice of intent to claim a tax deduction are all overly complex and could do with immediate simplification, according to SMSF Association CEO Peter Burgess.

The government’s plan to increase taxes on super balances above $3 million will have a costly impact on the SMSF sector, with thousands of members likely to face liquidity stress, according to new research from the University of Adelaide’s International Centre for Financial Services.

With new data showing offshore share investments comprise just 2 percent of total self-managed superannuation fund assets in Australia, advisers are warning SMSFs against overreliance on domestic shares and cash and urging diversification.

With almost $600 million worth of SMSF assets held in art – up 54 per cent since 2016 – the original alternative investment is seeing a significant resurgence in popularity.

Stakeholders have welcomed a recommendation from the Senate Economics Legislative Committee that the government review its controversial plan to limit franking credits stemming from capital raisings and share buybacks.

The test allows investors who can certify that they earn $250,000 a year or have more than $2.5 million in net assets to access higher-risk securities normally off-limits to individuals. But many say the test is confusing and outdated, and an independent statutory body has called for an update.

The bond market has never had great investment appeal for Australia’s self-managed superannuation funds, but with rising yields improving their proposition, some observers say the investment tide may be coming in for fixed interest.

After cutting its teeth as a commercial property lender during the GFC, Thinktank – thanks to strong strategic relationships and conservative credit policies – is well funded and prepared for the market to turn, says BDM Lauren Ryan.

Peter Burgess told the SMSF Association’s National Conference the industry group has pushed for some of the developments, while it continues to oppose others, such as a high-balance cap. The government now plans instead to double the tax rate for funds with very high balances.

The success and popularity of SMSFs has also given several hundred thousand people direct access to their retirement savings. More concerning, the ATO believes, is that fraudsters are starting to take notice.