Financial Planners Advised To Look into SAFs to Avoid SMSF Trouble

The complex rules that govern SMSF investments are apparently problematic and risky for fund trustees. Some financial planners or advisers, however, continue to push this to investors while overlooking Small APRA Funds (SAFs) as a more viable and efficient investment for business. 

Industry observers said the structure of the SAF is perfect for those who are particularly not keen or savvy on where their money should go. This means that investors would need to rely greatly on their financial planners take care of it. 

This brings less risk and less cost to planners as clients can take charge of their super funds without any burden that usually goes hand in hand with a complicated and technical SMSF set up. 

According to Chris Balalovski, the Head of Strategic Advise at Perpetual Private Wealth, companies can take advantage of this by offering smaller investment schemes through SAF. He also said that their clients could still avail the same results or benefits as an SMSF investment. 

Transferring investments (from SMSF to SAF) also bear no tax implications so Balalovski suggested adding this to a planner’s “financial advice kit bag.” 

These suggestions about SAF come at a time when the Taxation Commissioner has started to take appropriate actions aimed at SMSF contributions that have been carried out inappropriately or have gone over their contribution caps. 

Trustees and advisers would face imprisonment term or stiffer sanctions if found liable for any breach of rules. Balalovski said he has seen severe outcomes for the minutest breaches in the contribution caps.