White Papers

  AT WHAT PRICE: The hidden cost of financial fraud for SMSFs

SuperGuard 360 position paper number 2 published January 2018

The true cost to self managed superannuation funds (SMSF) of financial fraud and mismanagement is more than triple the amount reported, according to Rainmaker Information. Once all the associated costs and loss of potential earnings are taken into account, SMSFs lost around $103 billion over the past 10 years to financial schemes and products that were poorly or fraudulently managed.

Further, that does not take into account the emotional and physical toll caused by serious financial loss.

This figure is much higher than previous estimates because the cost of fraud has two elements: the fraud itself, and the cost of lost earnings due to that amount being taken out of the market and no longer achieving investment earnings. SMSFs are particularly vulnerable to such events as they do not have the same protection and avenues of compensation as traditional super funds that operate under the Australian Prudential Regulatory Authority (APRA).   Read more

  The Risks of Investing Outside the Flags; Protecting SMSFs from Financial Fraud

SuperGuard 360 position paper published June 2016

The rise of SMSFs

The self-managed superannuation fund (SMSF) sector has experienced massive growth in the past decade and is now worth more than $591 billion, representing almost a third of all superannuation assets. Industry analysts Deloitte predict SMSFs will be managing assets worth close to $3 trillion by 2035.

A substantial number of SMSF members are over 50 years of age and have chosen to invest their superannuation money in an SMSF because they are seeking more control over their investments, particularly as they near retirement age. Increasingly, younger people who want more control over their superannuation investments are also opting for SMSFs.

The size of the investment pool, the independent nature of SMSF members and the fact that a large percentage of SMSF funds are invested in direct property and shares, means they need to be particularly vigilant against financial misconduct and fraud.   Read more

"An ounce of prevention is worth a pound of cure." - Benjamin Franklin