“The philosophy around SMSFs is that people should be allowed to make their own mistakes,” Mr Maddock said.

“If these people want to lend at 18 per cent to this bloke to start a garage down the road, well, the philosophy of having a self-managed super fund is that people should be allowed to do that,” he said.

“In the self-managed space, I really don’t see a place for the regulators to play strongly as long as information is clearly provided and truthful. That’s the obligation we have to the self-managed sector.” 

Fellow panellist Oliver Harvey, ASIC’s senior executive leader of financial market infrastructure, questioned Mr Maddock’s position, pointing to the simplistic view of the “philosophy”.

“There are social implications for a merry band of retirees getting it horribly, horribly wrong,” Mr Harvey said.

“Where that responsibility ultimately ends up in a socio-political environment, it is never quite as simple as saying, ‘Well, I’m sorry you made a couple of bad mistakes at the end of your financial life, I wish you all the best’.”

Mr Maddock said the pension is still available for those with “bad luck”.