The Coalition's free market preference is likely to be evident in the way it approaches SMSF regulation. Assistant Treasurer Arthur Sinodinis, talking at a discussion facilitated by the Financial Services Council has said he prefers a “fairly flexible” regulatory regime for SMSFs.
Sinodinis said philosophically, the government "quite likes" self-managed super funds because people take responsibility for their own savings. "The regime that is attached to that has tended to be a bit more light touch than the regime you get around APRA-regulated funds,” he said. “But the other side of that is that people in that situation should not expect that the government necessarily comes to their rescue.
“The politics of this has always been that if things get really hot, the government always comes to the rescue, depending on how much they’re feeling the heat. But philosophically, I would prefer a situation where the regulation remains light touch.”
Sinodinos expressed concerns that borrowing and gearing within SMSFs may fuel a bubble within the property market, although he does not believe that is the case yet. He said the strength in the property market was probably more due to low interest rates.
Meanwhile, a survey of financial advisers by Instreet Investment has found that their clients (mostly SMSF trustees) have a strong interest in overseas shares. Only 11 per cent of advisers reported that their clients had no interest in overseas markets, with the vast majority – 89 per cent – saying their clients are considering investing. Fifty five per cent are conisdering exchange traded funds, 22 per cent managed fund and 11 per cent want to invest directly.
Instreet suggests that this ingterest reflects a belief that the Australian dollar is overvalued. "The emergence of the ETF market, too, has played its role. They are easy to get in and out off and can come with lower fees than a managed fund."
There is interest in US stocks, but European stocks get the most attention. This reflects a view that the depressed valuations will at some point correct.