“The papers will be coming out next year and I think that will determine whether there is further regulation of the SMSF sector and whether the [government] takes up the FSI’s suggestion to ban loans to SMSFs,” he said.

Mr Agland said the proposed tax reforms in the paper are likely to cover issues such as whether there should be caps on the tax advantages enjoyed by wealthier individuals.

“That’s something that will have to be addressed as it was covered in the Financial System Inquiry Report – lots of people have been putting it out there that we need to look at the issue of big tax advantages,” he said.

The other issue that may be raised in the white paper, Mr Agland said, is the need for a consistent tax regime across the accumulation phase and pension phase.

“I suspect the government won’t do anything in relation to that – I suspect they’ll leave pensions untaxed and leave the other taxed as they currently are,” he said.

Mr Agland said if the government does looks at implementing tax change proposals from either the FSI report or the tax reform white paper, which is yet to be released, it could have large impact on the SMSF industry.

“One of the areas the FSI has picked up on is in relation to franking credits and whether they should get rid of [them],” he said.

“In the SMSF sector there is a lot of investment in securities because of the franking credit advantage.”

Mr Agland said if the government did decide to remove franking credits, investment decisions could change “quite significantly” – “there would be a real radical change to the sector”.

He said a decision like this by the government could see a transition among trustees from Australian equities to overseas equities.

“There would be a sell off of certain stocks and they would put investments in other areas,” he said.