Advisers encouraged to clarify documents in bid to improve rollover standards

Peter Burgess, who also works as director of policy and education for the SMSF sector’s peak body, said the sector is still experiencing frustrating delays when rolling over funds from APRA-regulated funds to SMSFs while speaking at the association’s national conference in Adelaide this week.

The SuperStream rollover standards for SMSFs, which were introduced in October 2021, were designed to improve the efficiency and security of rollovers between the two sectors through streamlining the process and eliminating paper-based rollovers.

Mr Burgess suggested that a major factor in the rollover delays is due to his belief that APRA-regulated funds are unable to adequately verify the SMSF bank account through the ATO’s SMSF verification service (SVS).

“There is no verification against the information held by the financial institution, and therein lies the problem for the APRA-regulated funds which are required under their AML/CTF obligations, and their own client identification processes, to identify and verify the SMSF bank account against information held by the financial institution,” Mr Burgess said.

To avoid the delays when initiating a rollover from an APRA-regulated fund, Mr Burgess urged financial advisers to clarify what documents are required by the fund to satisfy the verification requirements.

Mr Burgess revealed that the SMSF Association is now meeting with the APRA-regulated fund sector on a regular basis and that both are committed to investigating the issues and remove barriers.

“Ultimately from the SMSF Association’s perspective, we would like to reach agreement with the APRA-regulated funds about the bank account verification documentation that they require to satisfy their obligations,” he said.

“Hopefully this can then become a standard that applies to all APRA-regulated funds so everyone knows upfront what bank account verification documents are required, and we can avoid situations like we have now where the bank account verification documentation can vary between funds and sometimes within the same fund.”

Elsewhere at the national conference, Mr Burgess blasted the government’s non-arm’s length expenditure (NALE) rules.

Mr Burgess said the rules - which are designed to prevent superannuation funds from circumventing contributions caps and artificially inflating fund earnings through non-commercial dealings – “have much broader implications” for the super sector than originally intended.

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.