Regulation changes won't fix super flaws

But all the gold plating ­ which on my rough figuring lowers returns by around $200,000 over the forty-year life of an SMSF ­ isn't the worst of it. Even as SMSFs consume billions in professional services per year, horror stories are increasingly common. Meanwhile the auditors tick boxes ­ just like the regulators.

Each year my fund is audited to comply with Sections 52(2)e, 52(2)d, 62, 65, 66, 67, 69-71E, 73-75, 80-85, 103, 106, 109, 111, 112, 113(1A), 121 of the Act and Clauses 4.09, 5.08, 6.17, 7.04, 13.12, 13.13 and 13.14 of its Regulations. Auditors check that funds have an investment strategy considering risk, return, liquidity and diversity and that the investments are in line with the strategy (That's regulation 4.09 since you ask).

As expensive as they are, those requirements could have rescued Alison Cook from the predation of her professional advisors. But here's the thing; those who need the protection lack the skills to select the right advisors, lawyers, accountants and auditors.

So here's the bottom line: Our DIY super regulation is hugely and wastefully over-regulated for people like me who fancy they don't need all the professional 'help'. But with a carnival of high-risk investment products and predatory investment spruikers out there, all those ticked boxes are an elaborate and cruel hoax for the unwary.

Oh, and the Government's new regulatory policy will do nothing to address any of this.