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New MFAA chief to fight for SMSF lending

New MFAA chief to fight for SMSF lending

MFAA chief executive Siobhan Hayden has revealed she will defend SMSF borrowing in a fresh submission to the Financial System Inquiry.

Ms Hayden told Mortgage Business that the MFAA is comfortable with the use of SMSFs and leveraging through SMSFs.

“Obviously it has been tabled as a concern and we may have to lose that,” she admitted.

The much-anticipated final report from David Murray’s Financial System Inquiry (FSI) urged the government to prohibit certain SMSF borrowing arrangements.

The panel recommended a removal of the exception to the general prohibition on direct borrowing for limited recourse borrowing arrangements (LRBAs) by superannuation funds.

“Initially I was disappointed because I do think SMSF borrowing can be implemented safely with consumers being protected,” Ms Hayden said.

“We will mention that in our submission by March next year back to the inquiry. I will be advocating the benefits of it in a submission.”

If the proposed SMSF borrowing changes are implemented, SMSF lenders would withdraw their products and broker training courses would cease, Ms Hayden said.

The MFAA is currently running an SMSF lending course that has been well received by brokers looking to enter the space.

While the FSI recommendations now put the future of the MFAA’s support for the diversification benefits and referral relationships that come from SMSF lending in question, Ms Hayden is confident that the FSI will deliver positive outcomes for consumers.

“The good thing about the FSI is that it aims to ensure a fairer system and a more competitive system while protecting the rights of consumers,” she said.

New MFAA chief to fight for SMSF lending
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