Mr Wilson said Tax Office data to be released on Monday revealed how the inclusion of certain expense types claimed by comparatively few SMSFs skewed the average cost figure upwards.
“Of particular concern is ASIC’s claim that it costs $13,900 annually to run an SMSF has been revealed to be sheer fantasy, as this figure includes investment and interest expenses,” he said.
Mr Wilson said the ATO’s 2017-18 statistical overview provided disaggregated and detailed data to show the “true” cost of running SMSFs based on the value of assets under management.
These included “investment expenses” and “domestic interest expenses”, along with “international interest expenses”, which were claimed by only 351 funds (out of 500,000 nationwide), and “forestry managed investment scheme” costs claimed by only 353 funds.
“The fact sheet contains a number of absurd claims from ASIC, including that the cost of financing a loan for investments amounts to an administrative cost, and that more than half the maximum annual concessional contribution of $25,000 is spent on administration,” Mr Wilson said. “It simply lacks logic.”
ASIC released Self-managed super funds: Are they for you? last October. The fact sheet cautioned consumers about the time and cost involved in setting up and running an SMSF, as well as highlighting a tendency to produce lower returns than some regular super funds.
“SMSFs with balances below $500,000 have, on average, lower returns after expenses and tax compared to industry and retail super funds,” the fact sheet says, quoting findings by the Productivity Commission.
“On average, SMSFs with balances above $500,000 have returns that are competitive with industry and retail super funds after expenses and tax.”
Mr Wilson said the $13,900 figure for the average cost of running an SMSF “was met with widespread surprise, confusion and shock by financial industry experts”.
The fact sheet also warns consumers that running an SMSF could be time consuming. “SMSF trustees spend 8.4 hours a month, on average, managing an SMSF – that’s over 100 hours a year,” it says.
The ATO data released today shows average expenses rose to $14,879 in 2017-2018. Average expenses have been steadily rising from $11,301 in 2013-14, but are much lower for smaller balance SMSFs than for larger ones.
“The fact that so many elements in ASIC’s … fact sheet are fundamentally misleading raises serious questions regarding the basic competency of our financial regulator,” Mr Wilson said.
“ASIC should immediately remove its deceptive fact sheet, verify all other data, correct it, and reissue it with a public apology to Australians.”
ASIC has been contacted for comment.