The first thing I did when I opened the final report from the Hayne Royal Commission into Banking Misconduct and Superannuation was to search for “SMSF”. Other than the definitions, it appeared twice – once to explain that SMSFs are administered by the ATO and the second time in the context of explaining choice in superannuation.
So is it surprising that none of the 76 recommendations specifically relate to SMSFs? And that none of the commentary that was so unflattering about our largest financial institutions, their management and their culture touched on SMSFs?
In a nutshell probably not. For a start, the terms of reference largely related to the behaviour and regulation of financial services entities, not the superannuation system itself. Perhaps even more relevant, though, SMSFs are in fact almost the thinking person’s response to all the terrible things that were revealed in the Royal Commission hearings. The great thing about an SMSF is that it empowers individuals to take charge of their own retirement savings journey and make informed choices about the advisers, products and services they use.
Of course, SMSF trustees are not immune from poor advice and many SMSFs use products provided by the financial institutions criticised in the Royal Commission. Some of the recommendations therefore do touch SMSFs and are worthy of further discussion.
But it was telling that – like the Productivity Commission’s recently completed review into superannuation – the Royal Commission found no need to raise specific concerns about SMSFs. This might come as a surprise to those routinely concerned that limited recourse borrowing will cause the end of the world as we know it.