Are you a fan of Aussie Rules footy or do you like watching the Aussies belt the Old Enemy in the Ashes? Or more specifically the Magellan Ashes. That’s right, everything is accompanied by a sponsor and I have no doubt that in many instances the sponsor receives a return on their investment, particularly beverage sponsors! However, if I was a member of an Industry Super Fund I’d be asking “why are my investment returns going to the Gold Coast Suns rather than me?”. If the answer is that all of the investment returns are going to the members then I’d be asking for a reduction in admin fees. Of course I only highlight the Suns because I follow AFL, and it leads to a great conclusion!
Don’t worry, I’ve seen the thinly veiled articles that suggest sponsorship is not a breach of the Sole Purpose Test but rather an operating expense and a clever marketing ploy to enhance memberships and therefore returns, although whilst the concept of the more you have the more you can make does seem logical, so does the more you have the more you can lose!
Anyway, I’m not going to be critical of super funds sponsoring events, rather I’m going to open the door to equality because my SMSF only has two members and clearly if my fund sponsors the local footy team then I am advertising what a great trustee I am and that by joining me (I’ll only accept the first two offers) you will be opening yourself up to years of accumulating wealth. It’s not about the corporate box access with all the beer you can drink and prawns you can eat, these benefits are isolated to 11 times a season and are incidental to the decision of the trustee to act in the best interest of the members and their beneficiaries and to provide for their retirement.
All APRA based super funds are afforded the ability to spend coin on marketing materials that highlight the benefits of their particular fund, I’ve got no issue with this as I’m sure nobody else does, but when it comes to sponsorship, is it actually proven to attract members and be beneficial to the funds overall performance? Or perhaps it is just a status thing!
Of course sponsorship is just one way of highlighting the inequity between large and small funds, there are plenty of areas where large funds are under far greater scrutiny. Luckily for them those areas don’t include investing in related companies that carry on a business that represent greater than 5% of the fund assets – we all know that wouldn’t attract the attention of the SMSF regulator!
Anyway, if allowing funds to sponsor teams is purely an operational expense and those funds can continue to thrive and generate positive returns for their members then I’m sure nobody will have an issue. However, if sponsorship is a means to highlight success and fund performance then surely there are better choices than the Gold Coast Suns!…..Too harsh?