The Institute of Chartered Accountants Australia today said borrowing in self-managed superannuation funds should be reviewed in light of the growth of the sector.

The Institute of Chartered Accountants Australia today said borrowing in self-managed superannuation funds should be reviewed in light of the growth of the sector.
The Institute supports and echoes comments by the Assistant Treasurer, Senator Arthur Sinodinos, that Australians should ensure that the ultimate objective of their superannuation is to preserve and maximise their savings in retirement.
The SMSF sector is expected to continue to grow rapidly. A Deloitte report released this week indicates that the super industry will be worth $7.6 trillion by 2033 and that $2.23 trillion of this will be in SMSFs
alone.
Institute Head of Superannuation Liz Westover said that while borrowing can be a useful way of increasing your retirement savings, trustees need to ensure that it is used appropriately for quality investments.
“We need to be looking at the policy framework relating to borrowing within SMSFs and whether, in light of unprecedented growth in the sector, it will continue to be appropriate.
“The Cooper Review found a review into borrowing in SMSFs was needed within two years. The government is right to look at undertaking such a review and the Institute supports this as an early act of the new government,” she said.
Ms Westover said greater focus needs to be given to the quality of advice available to consumers in relation to setting up and operating an SMSF and in particular in relation to borrowing.
“Australians should seek professional advice when they are considering an SMSF - borrowing should be the last thing people consider when deciding whether to set one up or not.
“Instead, greater focus needs to be around improving the availability of quality and objective information and advice around whether an SMSF is the right retirement vehicle for individual circumstances.
“Lifting the quality of advice and addressing the growing concerns related to borrowing arrangements is crucial to the ongoing strength of the sector.”
The Institute will continue to work with ASIC, Treasury and the government to ensure that education and competency standards in the profession are set at an appropriately high level.