I think as always it was a good year for the SMSF sector in 2014. I think we’ve seen continuing strong growth in the numbers of SMSFs being established, it’s been nice and consistent throughout 2014. It’s probably been good to see the younger demographic starting to establish SMSFs as well and that’s something that the ATO statistics have shown – that we’re getting younger people, particularly those between the age of 35 and 44 establishing SMSFs and I think it bodes well for the SMSF sector, that it’s remaining attractive to enter an SMSF to gain control of their retirement savings.

Do you think the sector’s positive run will continue in 2015?

I think it will continue through 2015. SPAA research has shown … there are strong SMSF intentions still in the market to continue establishing SMSFs. The one thing we probably need to be wary of though is with reviews like the FSI around, that can often create a bit of uncertainty in people’s minds.

Will any of the recommendations have an impact on people looking to set up SMSFs, even if it’s just for a temporary period?

I think the one recommendation in the FSI that could affect people’s intentions to want to set up an SMSF is the recommendation on banning borrowing. Now that would only come to fruition to affect people if they had intended to start an SMSF and have an LRBA as a significant part of their investment strategy. I think if we actually look at the stats again on the amount of LRBAs in the market and also the number of funds who have a high concentration towards a singular asset with an LRBA with a single asset – which is already low – I think that’s only going to have a very small effect on establishments going forward for SMSFs.

Will it have an impact on people with small businesses who are looking to set up an SMSF with borrowing to acquire property for their business?

Yeah I think that’s a good point, people who have a small business and are looking to acquire assets within their funds, business property with their LRBA, I think that’s going to cast doubt on what their future strategies might be. It’s important to remember though, at this stage there’s no end date for LRBAs only a suggestion to the government, and the government still has to make a decision on whether they’re going to accept or implement the Murray panel’s recommendations. We know that the government is still consulting until the end of March on different views from the community on what they should do with the FSI report, so there’s still a fair bit of water under the bridge before we actually see anything happening or changing with LRBAs.

Do you think it’s likely that LRBAs will be banned?

It’s hard to say whether it’s likely to be banned, what’s going to be important is that the government is going to take into account a number of different views and I think an important view is obviously that put forward by the Murray Inquiry. But also I think the government will take time to listen to a number of different views out there, especially those from the SMSF sector. For instance SPAA will be putting forward our view that any risks that may be building in the system through the use of borrowing by SMSFs can be mitigated through other measures and we have already put that forward to the FSI.

We can do some things like making sure LRBA advice is licenced as an AFSL financial product to make sure people are getting high-quality advice around LRBAs … and also limiting the use of personal guarantees will make LRBAs truly limited recourse in their nature, so a bank then couldn’t seek recourse against a trustees’ personal assets because of the personal guarantee. We think those areas will actually really tighten up the use of LRBAs and help ensure there’s still integrity around how they’re used in the sector. Our general view is that we don’t see large scale problems, but these measures can just make sure that nothing occurs down the track.

What are your thoughts for the SMSF sector in 2015?

For 2015, I don’t think we’re going to see much more immediate legislative change. The government, after they won the election in 2013, went through a process of clearing the backlog of tax measures and we’re working through that process still. There’s still a few measures to be processed in 2015 through Parliament – they’re not going to be overly substantial.

I think where our attention is going to be in 2015 [is] the implementation of the FSI, how these recommendations might be risked by the government and also the ongoing debate around professionalism in financial services and financial advice may be important. We’ve got the register of advisers being established early in 2015, which is going to be important; we have a parliamentary joint committee inquiry of professionalism to deliver its findings, which might paint a picture for the future of professionalism of financial advice; and we’ve also got FOFA still being implemented. I think they’re all kind of really important developments in 2015 for professionalism.

The other major debate or speculation we’re seeing in 2015 is around the tax white paper and that process will be kicking off really soon. I think it’s obvious from the FSI’s comments that came out on Sunday that superannuation tax concessions are going to be looked at closely through the white paper and that’s definitely going to be something for SMSFs during 2015.

If the superannuation tax concessions are changed will that have a big impact on the SMSF industry?

I think the tax concessions being changed can have a large effect across all superannuation and how people decide to contribute to super and take their retirement savings out of super, depending on what might be recommended and what’s looked at. But none of those changes will affect SMSFs differently to large APRA funds and something that the tax white paper [should] ensure is a neutrality of treatment across different super funds.

So if we look at it from that perspective that shouldn’t necessarily change people’s motivations to either be in an SMSF or establish an SMSF so I don’t think it will affect the SMSF sector more than any other part of super.

What are some of the things you’re lobbying for in 2015?

The key things on SPAA’s agenda would definitely be looking at the FSI implementation and we’ll be speaking to government early in 2015 and making our submission to the government’s consultation process on how we think the recommendations in the FSI should be addressed.

Also the tax white paper, it could be really important. SPAA is going to make a major contribution to the debate around superannuation tax concessions in 2015 and that’s something we’ve been arguing quite strongly for a long time about – the importance of tax concessions and also the importance of making sure we get the measurement of those tax concessions right.

[It’s also important that] we are having a properly informed debate and that’s a message we’ll continue to keep delivering in 2015. I think the third key area is professionalism again and that’s going to be ongoing from this year and I think we’re seeing a large debate around financial advice and professionalism in 2014, and I think in 2015 we’ll start seeing that debate shifting to how can we do it and what changes do we need to make to keep pushing professionalism and financial advice forward. More generally we’ll be looking at the licencing changes that are coming out with the limited licence transition period – which is ending in 2016 so we’ve only got 18 months of it to go – and also looking at financial advisers transitioning into the tax practitioner board regime which will continue throughout 2015 as well.