The Federal Government has announced a package of proposed reforms to strengthen consumer protections and build resilience across the Australian superannuation and financial system, including the self-managed superannuation fund (SMSF) sector. Â
The reforms are part of the Government’s Protecting Consumers in the Superannuation System measure. In its media release, the Government said the package is designed to strengthen consumer protections, improve access to safe financial advice and guidance, and place the Compensation Scheme of Last Resort on a firmer and fairer footing.
The Government has linked the package to recent failures across parts of the financial system, where poor conduct can harm consumers. SMSFs give many Australians more choice and control over their retirement savings, but that control comes with responsibility.
Simply stated, the announcement sets the direction, but not the full rulebook. Trustees should treat the reforms as important proposals and wait for more detail before changing existing arrangements.
The Australian Taxation Office (ATO) may receive new powers to stop rollovers into newly established SMSFs while it investigates concerns about fraud, financial abuse, misconduct or potential harm. This would allow earlier intervention before retirement savings leave an existing super fund.
For genuine SMSF establishments, the key question will be how the process operates in practice. A targeted approach would help protect members at risk without creating unnecessary delays for trustees who are setting up a fund for appropriate reasons.
New trustees may need to complete mandatory education before registering an SMSF. This would help trustees understand their legal and compliance responsibilities before they manage their own superannuation fund.
This is an important reminder that an SMSF is not a set-and-forget structure. Trustees remain responsible for their fund’s decisions, records and compliance, even when they work with accountants, administrators, financial advisors or auditors.
The announcement also proposes that SMSFs hold uniquely identifiable bank accounts. This may help regulators and institutions identify SMSF accounts more clearly and detect fraud or suspicious activity earlier.
The practical detail will matter. Trustees will need to understand whether the requirement applies only to new funds or also to existing accounts, and what steps banks and SMSF administrators will need to take to support the change.
New SMSFs may need a written investment strategy at establishment. This would encourage trustees to consider the fund’s objectives, risk profile, liquidity needs, diversification and member circumstances before investing.
The Government has also indicated it will consult on improving the quality of SMSF investment strategies. This may be a positive step if it leads to more meaningful documents that guide trustee decision-making, rather than generic templates prepared only to satisfy a compliance requirement.
The proposed reforms would allow the ATO to collect more information about financial advisors and other parties involved in establishing SMSFs and managing ongoing advice fee deduction arrangements.
This measure focuses on visibility. Clearer information may help trustees and regulators understand who was involved in establishing the fund and how advice fee arrangements operate over time.
The Government has proposed aligning the SMSF supervisory levy with fund establishment and increasing the levy from $259 to $295. This would be the first increase since 2013.
The stated aim is to support stronger consumer protection measures and help safeguard SMSF members from financial abuse, scams, fraud and misconduct. Trustees establishing new funds should factor this into their set-up costs once the final rules are confirmed.
SMSFs may also contribute to the Compensation Scheme of Last Resort when a special levy is required. The fact sheet says all SMSFs would be included as Tier 3 levy payers in the waterfall model in future years when a special levy is required.
The sector levy for SMSFs would be scaled relative to assets under management when compared with the broader superannuation trustees sub-sector, with a flat levy amount applying to all funds. As with the other proposals, trustees should wait for the final rules before assessing the full cost and timing.
For now, trustees should stay informed and avoid making rushed changes based on headlines. The proposals are not yet law, and the practical impact will depend on the legislation, consultation process and guidance that follows.
Existing trustees should continue to meet their current obligations, including maintaining appropriate records, reviewing their investment strategy and seeking advice when needed. Prospective trustees should use the announcement as a prompt to consider whether an SMSF suits their objectives, knowledge, time and support network.
To find out more, you can read the Government’s full announcement and the factsheet.Â
SMSFs can work well for the right people, but they are not suitable for everyone. At Boyce, we help trustees understand their compliance, tax and long-term wealth planning obligations so they can make informed decisions. If you are considering an SMSF, reviewing your current fund or working through how the proposed reforms may affect you, get in touch.
