Responding to ASIC’s release of proposed guidelines to introduce additional disclosure requirements for advisers to SMSF trustees, lawyer Peter Townsend says advice professionals are the victims of SMSF ‘naysayers’.
“It saddens me to see that ASIC is buying into these negative arguments by going back to its usual solution of making advisers create more paperwork – more disclosure requirements, more documents that few read or understand, even more transference of liability to advisers – and all to solve a problem that doesn’t really exist,” Mr Townsend said.
“Instead of spending time ensuring advisers tell all investors in SMSFs that they don’t have access to the statutory compensation scheme for theft or fraud maybe ASIC could spend more time ensuring that this theft and fraud doesn’t occur in the first place.”
Mr Townsend called on advisers not to be affected by the “anti-SMSF agenda” and the view that SMSF structures are only suitable for high net worth investors.
“Any person with average intelligence and good professional advice can have their own super fund and can be as compliant as necessary,” he said.
The SMSF Professionals’ Association of Australia (SPAA) – which counts a great number of financial advisers among its membership – welcomed ASIC’s proposed disclosure requirements but questioned whether the same scrutiny should be applied to APRA-regulated funds.
“It is interesting that we don’t see similar analysis of the larger superannuation funds and whether a particular fund may be the right one for a particular client,” SPAA director of professional standards Graeme Colley told ifa.
Meanwhile, in a sign of more harmonious relations between financial planners and accountants, Institute of Chartered Accountants head of superannuation Liz Westover defended the role advisers play in the SMSF sector.
Commenting on the ASIC SMSF disclosure proposals, Ms Westover said the “hole in the picture” is ASIC’s focus on the trustees that do obtain professional advice, rather than those who don’t.
“You’re not required [to get] advice to set up an SMSF, You can go to online providers and download all your own legal documents… so my concern is how do we make sure those people are not only able to access advice but do actually access that information,” she said.
“I think we’ve got to be very careful that we don’t overregulate to the point where it becomes too costly to obtain advice.”
Some background> I have 30 yrs experience as an adviser, AFSL AND as an RTO teaching DFP and SMSF accreditation. A few years back one accountant (CA) with 30+ years exp, needed accreditation for SMSF clients. Accreditation was easily achieved. BUT the only product recommended by the accountant was a well known, now defunct, agribusiness fund. The acct told me many clients already recommended into this fund. No doubt many more followed. The fund failed less than a year after qualifying. Obviously the clients needed better advice! Training, experience and qualifications are not sufficient for good advice. What is needed is accountability! We see, in hindsight, situations which were evident but unrecognised before hindsight. BTW I ceased my RTO due to, in my opinion, reckless interference by new regulators. I am not unhappy that ASIC shut down the register. Perhaps some better process will result. I don’t believe the register was ever monitored or reviewed for many years.
[quote name=”James J”]Russell….thanks for that…When I first started a well known Investment Adviser in Canberra convinced me that CDO’s were the way to go so I bought some he recommended sold by Macquarie bank. We all know how well they performed!!!. Since then I only trust my own judgement and I am doing better than average.[/quote]
Agreed, that many will do better with a simple and careful investment strategy than those crazy products the banks produce.
I deal with a number of SMSF clients, and the primary risk they face is over-regulation and high cost of errors. Being made non-compliant can cost nearly 50% of your fund, and has nothing to do with whether you picked a good or bad stock.
[quote name=”Gerry”]Funny…I thought people set up an SMSF because they don’t want or need advice. It’s called self managed for a reason. Seems like its now being used as a commonplace vehicle based on professional recommendation. Real estate agents hooking up with financial advisers ….something weird going on.[/quote]
Gerry. most SMSF do need advice. For many folks the rationale in setting up a SMSF is to allow the flexibility to implement strategies that are often not available in ‘packaged’ solutions.
Some folks want to pick their own share portfolio, the funds or business property etc.
They still need strategic advice. What they probably don’t need is to be told where to put their $, and that is a problem for FP who are restricted to various platforms.
Russell….thanks for that…When I first started a well known Investment Adviser in Canberra convinced me that CDO’s were the way to go so I bought some he recommended sold by Macquarie bank. We all know how well they performed!!!. Since then I only trust my own judgement and I am doing better than average.
Sorry James J but sadly too many SMSF Trustees are indeed simpletons and they desperately need help. From my experience I see too many ‘Trustees’ (mums and dads) having a SMSF set up for them by their accountant; they have nothing but TDs in their fund; and their accountant cannot provide me with basic details (e.g. preservation, tax-free/taxable status etc). If might be one thing to call oneself an accountant but there are many disciplines in the area of accountancy – and accounting for SMSF is just one of them. It is about time accountants had accreditation/certification in SMSFs too then maybe allot of issues may fade.
I can feel another course / accreditation coming.
The fpa will think of something to suck you out of $990 for a online pice of rubbish.
Too many opinions from too many people.
Governments should shut up and get out of the way…..SMSF Trustees are not simpletons and are perfectly able to look after themselves. Sure they may make some mistakes when first starting out. “Let he who is without sin cast the first stone”. Over regulation will kill a generally good system.
Where are the FPA with all of this? Seems like a deer in the headlights. Again. You wonder why you’d bother paying a membership to an organisation with such a lack of leadership. You’d be forgiven for thinking that stating you’re a member of this association is becoming a liability to an adviser’s business.
Funny…I thought people set up an SMSF because they don’t want or need advice. It’s called self managed for a reason. Seems like its now being used as a commonplace vehicle based on professional recommendation. Real estate agents hooking up with financial advisers ….something weird going on.