Self-managed super funds (SMSFs) are the fastest growing form of retirement saving, accounting for about one in every three dollars of the nation’s $1.4 trillion pool.
It is expected they will account for more than 40 per cent of super payments within 15 years.
Financial Rescue managing director Neil Kendall said he is seeing some horrific things happening.
The company specialises in representing loss victims.
“Uninformed people don’t understand the dangers they put themselves in.
“Consumer protections don’t exist and people are incredibly vulnerable,” he said.
Some accountants and advisers, who may be seeking new sources of income as commissions are abolished, are recommending SMSFs to clients to generate a steady flow of advisory and administrative payments.
Retail demand is booming, fuelled by their flexibility, new trading technology and growing social status as a must-have for those attracted to the idea of controlling their own destiny.
A recent survey by the SMSF Professionals’ Association of Australia found they are popular and successful with sophisticated investors who use professional help.
But there are growing concerns that the funds are being used by people ignorant of their responsibilities.
Mr Kendall said he sees a growing number of people, typically husbands and wives, agreeing to strategies and instruments they don’t understand in self-managed super.
Seminars and online marketing target real estate investors with free lunch seminars showing how super can be used to build a property portfolio.
