The new changes, which outline mandatory academic and professional requirements for the financial services community, must be extended to SMSF trustees, according to consultant John Wiseman.

“Trustees should be required to have a minimum level of education to undertake an SMSF and both the government and industry should be concerned by this lack of financial literacy and competency,” Mr Wiseman said.

“To have these responsibilities in the hands of someone who is not competent and academically qualified is a disaster waiting to happen and in the end, the only winners will [be] the legal fraternity as these situations will invariably end up in the courts.”

The current penalty for non-compliant trustees, often an education directive to undertake a course at their own expense, is not sufficient, according to Mr Wiseman.

“I liken the current SMSF situation as only requiring an unlicensed car driver to undertake a course to obtain a licence only if they are involved in a road accident”, he said.

“Regrettably, the real life casualties when these ‘financial accidents’ occur are invariably the spouse, family members, disabled [or] financially dependent children, business partners etc.” 

Given this scenario, Mr Wiseman said it is vital that the government implement new legislation that ensures SMSF practitioners are educated and qualified.

“Investing in shares or buying [and] selling property inside SMSF frameworks is simply not an undertaking for the amateur [or] unqualified practitioner as the taxation implications and adverse impact on retirement nest eggs can quite literally be catastrophic when mistakes are made.”