Research reveals key SMSF regulatory guideline requires revision

Adelaide Business School researchers have demonstrated that a key SMSF regulatory guideline may need to be revised.

Using data on more than 300,000 unique funds, Prof. Ralf Zurbruegg and Dr. George Mihaylov were able to show that the investment performance of SMSFs with balances in excess of $200,000 is on par with that of much larger funds. Currently, regulators advise Australian financial services licensees not to recommend SMSFs for individuals with less than $500,000 in superannuation assets.

Prof. Zurbruegg said the results show reconsideration was required.

"Our results seem to suggest a need to rethink the regulatory focus on minimum fund size for SMSFs, there may be more effective ways for regulators to guide the sector," he said.

The research dovetails with earlier independent work which showed that SMSFs also become cost-effective at balances around $200,000. The findings have received attention from multiple media outlets and the researchers are scheduled to present their work at the SMSFA National Conference later this year.