Masterclass SMSF – Borrowing in Self-Managed Super Funds – Riskier and More Complex?

Borrowing in Self-Managed Super Funds – Riskier and More Complex?

Borrowing in Self-Managed Super Funds – Riskier and More Complex?

Mike Taylor of Money Management on 22 January writes:
“The Australian Prudential Regulation Authority (APRA) has signalled it regards lending to self-managed superannuation funds (SMSFs) by banks as potentially riskier than other forms of lending. The regulator pushed its way into the debate around lending within SMSFs last week, via its role as a banking regulator and by stipulating how lending institutions should treat loans to SMSFs. In a letter to all Australian incorporated Authorised Deposit-taking Institutions (ADIs), APRA’s executive general manager, policy, research and statistics Charles Littrell said the regulator was seeking to clarify the appropriate capital treatment of ADIs’ loans to SMSFs that are secured by residential mortgages.” MORE
However as Damon Taylor at SMSF Weekly reports, 22 January:
“In the wake of the Australian Prudential Regulation Authority’s (APRA’s) warning that loans to self-managed super funds (SMSFs) are more complex than those in a traditional retail environment, Craig Morgan, director of SMSF Loans, has voiced his disagreement. “While they are limited recourse, the rewrite of SIS 67A in July 2010 made it clear that Personal Guarantees were acceptable,” he said. “APRA’s concerns around enforceability are therefore viewed as extremely conservative.” With more than five years experience lending in the DIY space, Morgan said that the average loan-to-value ratio (LVR) for residential property loans was around 65 per cent, with commercial around 55 per cent.” MORE

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Self-Managed Superannuation Service Providers in Australia. WE do not provide Financial Advice or any other service that requires a legally authorized provider. However, where such advice or service is required we have our ‘Connect Assist’, a SuperBenefit resource we use to connect clients to a Licensed Advisor or other legally authorised service provider. SuperBenefit provides a wholistic SMSF assistance, education and administration service continuum - 1. “assistance” is help of whatsoever nature where our overall SMSF experience and knowledge enables us to provide assistance/help without any legal (or “license”) limitations. 2. “education” involves providing knowledge through teaching, coaching and mentoring about all matters SMSF, including (but not limited to) investment issues such as equities and property, 3. “administration” encompasses all admin aspects of legally required SMSF trustee and member record keeping including (but not limited to) audit and ATO matters. In keeping with our key point that SuperBenefit does not provide Financial Advice, where issues arise from 1, 2, and/or 3 above Indicate a need for a legally authorized provider (such as a Financial Adviser) and the client does not have their own service provider, the client can utilize SuperBenefit’s ‘Connect Assist’ … SuperBenefit, in itself, does not provide Financial Advice, but it does provide the wherewithal for great SMSF service. Call us 0407 361 596, no obligation FREE Connection call to see how we can help you!
This entry was posted in SMSF Investing, SMSF Property, Super Law & Compliance and tagged , . Bookmark the permalink.

One Response to Masterclass SMSF – Borrowing in Self-Managed Super Funds – Riskier and More Complex?

  1. rileymackenzi says:

    A great article thanks for sharing this write-up over self managed super funds. I have gone through your internal link, as well and have gathered a huge information from there over these funds.

    Like

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