INSPIRING you to CREATE your financial FUTURE.

  • (03) 9602 0888
Tap to Call Now | (03) 9602 0888

INSPIRING you to CREATE your financial FUTURE.

  • (03) 9602 0888

Compliance focus impacts wind-ups

The ATO’s strategic increased focus on compliance is having a noticeable effect on the sector and is now the most common reason why many SMSF trustees have closed their funds, the latest Investment Trends research has shown.

.

“A speech by ATO deputy commissioner Emma Rosenzweig delivered at this year’s SMSF Association National Conference indicated the regulator intended to ‘level up’ its SMSF compliance and we believe this is already happening,” Investment Trends analyst Yigit Gunhan told selfmanagedsuper.

“This is because when we asked former SMSF trustees why they switched back to a public offer super fund, the primary reason they gave us was that their fund was closed by the ATO.

“Just last year this was one of the least common reasons behind winding up a fund, but now it has become the main reason, which is why we think the ATO has already ‘levelled-up’ its SMSF compliance.”

Specifically, 30 per cent of survey participants this year indicated they are no longer SMSF trustees because the regulator had shut down their fund. This represented a dramatic increase from the experience of previous years where, in 2023, 6 per cent of respondents cited this as the reason for exiting their SMSF and, in 2022, 4 per cent expressed this was the case.

Concern over investment returns was the second most nominated reason trustees gave as to why they no longer ran their own super fund. Of those surveyed, 28 per cent said they wound up their SMSF because public offer funds were outperforming it. Only 16 per cent of trustees shared this sentiment in 2023, while 26 per cent answered similarly in 2022.

The age of trustees was another telling factor in SMSF wind-ups. This year, 23 per cent of study participants cited getting older and other members being unable to manage the SMSF as the reason for exiting the sector. Last year, 16 per cent of trustees responded in this manner, while in 2022, 12 per cent did the same.

Data for the analysis was gathered from on online survey conducted in February and March.

 

 

 

June 27, 2024
Darin Tyson-Chan
smsmagazine.com.au

Want to know more?

Do you have a question about something you've read in this article? Need more information? Want to book an appointment? Simply let us know below and we'll get back to you ASAP.