ASIC slammed for ‘fake news’ SMSF fact sheet

October 28 2019
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The average annual costs of running an SMSF have been grossly exaggerated by ASIC in its recent fact sheet, with actual costs landing between $1,700 and $5,800 depending on the fund’s balance, according to SMSF software provider BGL.

“The document, in our opinion, contains numerous calculation and logic errors,” BGL said.

Data released by BGL, using the almost 180,000 SMSF clients on its Simple Fund 360 platform as a sample, showed that annual SMSF running costs for the 2018 financial year were: $1,709 for funds with a balance of under $200,000; $2,736 for funds with a balance between $200,000 and $500,000; and $2,896 for funds with a balance between $500,000 and $1 million.

The annual costs rose to $3,299 for SMSFs between $1 million and $1.5 million; $3,947 for funds between $1.5 million and $3 million; and $5,774 for those with balances over $3 million.

“We wonder what would be ASIC’s view if an industry or retail super fund published a document that was so misleading and contained so many errors? Donald Trump would call the document ‘fake news’.”

The costs to run a self-managed fund had also remained fairly stable over time and in some cases decreased, with costs for those in the $200,000 to $500,000 bracket decreasing from $2,648 in 2015 to $2,376 in 2018.

Costs had also come down for SMSFs between $500,000 and $1 million, from $3,314 in 2015 to $2,896 in 2018, and for those between $1 million and $1.5 million, from $3,856 in 2015 to $3,299 in 2018.

The company stated that in light of this data, the $13,900 annual cost quoted in ASIC’s fact sheet, Self-managed superannuation funds: Are they for you?, was incorrect and deceptive when it came to giving new trustees an idea of what was involved in running an SMSF.

“The real data tells a very different story from the ASIC document – so different that one must question ASIC’s motive for the release of this misleading document,” BGL said.

“This is what we get when the figures produced by one regulator (ATO) are used by another (ASIC) that seem to have a total lack of understanding of the data set.”

The software provider said ASIC should clarify how it came to the $13,900 figure in its document, and added that it would be releasing further data to counteract the performance figures shown in the corporate regulator’s fact sheet.

Earlier this month, nestegg reported on the ASIC warning that “SMSFs are not for everyone”.

ASIC commissioner Danielle Press had said that consumers are “all too well aware of the potential benefits that might stem from using an SMSF, but are not equally alive to the considerable risks and responsibilities that come with the deal”.

The SMSF Association then clapped back, expressing its disappointment at the tone of the fact sheet, and that the information presented “casts SMSFs in a very poor light”.

The association took issue “with the representation that the typical cost of running an SMSF is $13,900 a year”.

About the author

Sarah Kendell and Grace Ormsby

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

About the author

Sarah Kendell and Grace Ormsby

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

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