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MFAA chief executive Phil Naylor explains how the association is tackling self-managed super fund lending, believing firmly that SMSFs are here to stay
How great is the SMSF opportunity for consumers and what role can brokers play?
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Well, it’s a great opportunity for consumers. The statistics show that it’s a very big part of the whole superannuation sector and it’s growing. In particular, people who are involved with SMSFs are looking towards property and they are looking to brokers [for help with financing].
Can all brokers operate in the SMSF space?
In theory they can, but SMSF lending is a sensitive area. ASIC is looking at it very closely and is concerned with preventing it getting out of control. There’s been a lot of media [coverage] about spruikers, which are giving the area a bit of a bad name. So all brokers can participate but we’re recommending that it is a sensitive area and that they only get involved if they’ve done appropriate training. We’re finding that not everyone wants to be involved in SMSFs. People have looked at it and they say, ‘I’ll just stick to what I’m doing’. But there’s certainly a lot of interest in the SMSF space amongst brokers.
You’ve recognised the importance of SMSF lending with an MFAA accreditation?
Correct. We have established a qualification on completion of our SMSF training program. MFAA members get an MFAA accreditation, a tag line [for] SMSF lending. That will be specifically identified on our website, so consumers can see which brokers are equipped in SMSF lending.
How long has the MFAA program been running?
It’s been running for about three months now (as of November 2013) and it’s been really successful. We really didn’t know how many people would seek to do it, but at the moment – I’ve just checked this morning – we’ve had 180 registrations and about 35 per cent of those have actually completed the program. We’re also doing some group programs for a couple of the aggregation groups, so I’d expect that over the next few months, you’ll find a few hundred brokers will have gone through the program. That means there are 300 or 400 more brokers who are really well equipped to understand the appropriate new SMSF lending [space].
What is unique about the MFAA accreditation?
I think that the unique thing about this program is that it’s an ongoing program, so even when brokers are qualified MFAA advisers [for] SMSF lending can go back online at any time and review situations, and if they get situations with clients that are a little bit dicey, they can go back online and review the situation to see whether [they can] help them out of that particular issue. It’s not just ‘get the certificate and move on’; it’s really an ongoing thing , so you can continue to learn about SMSF lending.
Do you think the MFAA accreditation might blur the lines for consumers around seeking advice, so they might think ‘I can go to that broker and get my SMSF advice’?
No, it’s clear because it’s been called ‘SMSF Lending’. So it’s quite clear that brokers are only responsible for part of the SMSF relationship, and that’s a crucial part. That’s what ASIC and the other agencies are looking at – making sure that other people aren’t giving advice that they’re not qualified to give. So our priority is specifically SMSF lending, but it clearly outlines and articulates to brokers the relationship that they need to [maintain] with the other professionals in the SMSF space.
Do you believe SMSF lending is here to stay or do you think it will be a fad that will pass?
I think SMSF [lending] is definitely here to stay. It’s an integral part of the whole superannuation structure now. SMSF lending is more recent and it’s grown very rapidly. I doubt we’re going to see continual rapid growth but it will be a healthy chunk of this sector for the foreseeable future.
What’s in the future for MFAA members and SMSFs?
I think it’s a good future because it enables our members to enhance their relationship with their clients and provide that extra bit of expert advice in addition to what they would normally be providing.
