The core industry body for self-managed super funds has backed federal government comments opposing compensation scheme entitlements for SMSF trustees.

The SMSF Professionals’ Association of Australia announcement came following comments from Assistant Treasurer, Senator Arthur Sinodinos.

According to the Senator, the DIY super trustees needed to be “self-reliant” and take responsibility for their own financial decisions.

SPAA CEO Andrea Slattery agrees with these comments.

“The guiding philosophy underpinning self-managed super is that trustees/members take responsibility for their own retirement income outcomes,” she said.

“By opting to go down the SMSF path trustees/members have to appreciate that decisions rest with them, although they can get advice, either directly or indirectly, from Specialist SMSF advisors.”

Slattery added that compensation schemes, which can be implemented when a client has suffered losses due to poor financial management or decisions, should only apply to the broader financial services scheme.

However, SMSF trustees are still entitled to compensation where theft and fraud have occurred.

“Although SMSFs don’t have access to compensation under the Superannuation Industry (Supervision) Act 1993 (SIS) Act that is available, at the Minister’s discretion and only where it is in the public’s best interest to approve compensation for APRA-regulated funds, there are other legal avenues that SMSFs can pursue,” she said.

In pursuing compensation, alternative options for SMSFs include such things as, personal Indemnity schemes, actions under the Corporations law, action in the courts to obtain compensation for damages, the Financial Ombudsman, and the banking and credit legislation.