AUSTRALIA - Senator Nick Sherry has voiced his concerns over the governance of self managed superannuation funds (SMSF).
Sherry said: "The survey results indicate that whilst the majority of the sector is well managed, a significant minority may not be."
ATO found 21% of SMSF trustees had a low or medium knowledge of their obligations and 30% were unable to explain the 'sole purpose test'.
Some 15% of trustees did not have an investment strategy.
Sherry urged those recommending SMSFs to fully disclose the time and cost burden of set up and running the scheme and called on the industry to address the education gap for trustees on this issue.
The ratio of operating expenses to total assets for funds up to AUS$50,000 was shown by ATO to be a massive 10.51% but for larger funds, up to $200,000 the ratio dropped to around 3%.
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Employers whose dividend to deficit recovery contribution (DRCs) ratios fall outside the "normal range" should expect to see higher regulatory scrutiny, although no fixed ratio will be set.
Investment consultants and fiduciary managers should expect a final decision on the investigation into the market to be published by the end of the year, the competition watchdog says.