I agree with the self-funded super industry association's (SPAA) assessment of the need to protect SMSF members who are subject to fraud through no fault of their own.
As the self-managed super sector continues to grow it is being increasingly targeted by all sorts of intermediaries, service and investment providers. Any instance of opportunism that arises when a relatively new "market" starts to bloom brings with it the risk that some of those attempting to profit in the process may not be as honest as others.
We all know the script, SMSF is the fastest growing super sector. More people are taking control and becoming trustees of their own super funds. Surely they deserve some protection from fraud. It is just a matter of how that protection is funded.
According to SPAA, APRA regulated large funds are required to pay a levy to fund compensation in the event of fraud. Surely some sort of mechanism can be put in place, such as an affordably levy for SMSFs that have exposure to service and investment providers which may leave them vulnerable to fraud.
I would think that the Federal Government may have some duty of care to the members of all super funds to protect the nation's forced, that is compulsory, retirement savings, from crooks. We're all forced to lock up 9% of our salaries for our entire working lives (soon to be 12%). Super is now our largest asset after our homes in most cases, surely there needs to be adequate protections in place to prevent it from being subject to fraud. Maybe some sort of government guarantee up to a specified threshold or perhaps some sort of universal insurance scheme is needed. Isn't that just common sense?
