Katarina Taurian writes an article for the website SMSF Adviser wherein she writes that in comparison to the APRA, the SMSF sector is more vulnerable to the deceit of money launderers and organized criminals. One top reason cited for this is the fact that SMSF owners are often quite disengaged from their money pool and any fraud may not be detected till they take stock close to retirement.
Tracing is rendered difficult
The ATO, ASIC and APRA have distinctly different roles and this can become a double-edged sword. While it increases broad-based efficiency, it also makes it difficult to keep a tab on the nefarious activity of the wrongdoers.
Lack of prudential regulation encourages fraud
The SMSF sector is not prudentially regulated and any industry lacking such jurisprudence is always a happy-hunting ground for fraudsters. There are many average-funds where high-impact fraud can be perpetrated and because we are talking about relatively inexperienced SMSF owners here, detection may come far too late in the day.
Threat of money laundering
Let alone fraud, SMSF sector can be easy meat for those money launderers who are quite capable of hiding really big money transfers in the veil of SMSF investment activity. Super funds may find these delinquent players a tougher nut to crack now; given that the transit to ‘online’ SMSF transactions is fast taking place.
You can read the original article here.
I think that tougher measures will surely come into place and there is no escaping the idea but for now, it may be a more relevant assertion that the trustees of the fund will have to take the prevailing events to the battleground and work hard with their auditors to ensure that there is no lapse at least on their part.
