We were contacted by the SMSF Association about Tim’s recent “Self Managed or Self Mangled SMSF” report. They brought to our attention that we had inadvertently called into question the independence of the Rice Warner report.
In addition, there was some interesting research out last week regarding the ‘cost effectiveness’ of Self Managed Super Funds. With the disclaimer that Rice Warner was commissioned by the SMSF Association, so it is not what we would consider independent.
We should have clarified this statement. The report does meet the legal standards to be called independent. Nucleus is in no way questioning the independent status of the report, or the integrity of this specific report.
However, as analysts, we start with a healthy amount of scepticism when reading any report that has been commissioned. Especially when it supports the position of the entity paying for the report. Which is almost always.
This includes: independent experts reports for takeover defence, independent reports commissioned by political parties, independent reports commissioned by a company to support its share price, independent reports commissioned by fund managers and other commissioned research.
There is often useful information in commissioned research. And I’ll start reading them with less cynicism than if the entity had their own staff write the report. But there is an inherent conflict in commissioned research which is very difficult to overcome.