In a statement released today, the corporate regulator detailed its follow-up guidance to the taskforce findings of “room for improvement” in the SMSF advice space.
Consultation Paper 216 Advice on self-managed superannuation funds: Specific disclosure requirements and SMSF costs, released today, imposes new disclosure obligations on financial advisers.
Under the new proposed rules, advisers will need to “warn clients that SMSFs do not have access to the compensation arrangements under the Superannuation Industry (Supervision) Act 1993 in the event of theft or fraud” and “explain other matters that may influence the client’s decision to set up an SMSF”
“When it comes to planning your retirement, establishing an SMSF is a very significant decision. We want to help ensure that the SMSF sector is healthy, and that investors make informed decisions about SMSFs,” said ASIC deputy chairman Peter Kell.
“Our recent surveillance of the sector found that advice was not up to a standard we would like, so we will continue to work with the industry to ensure investors receive good quality, tailored advice from their accountant or financial planner.”
More to come.
Warning Warning….property bubble approaching. First home buyers pushed out of their first home by SMSF investors. Financial advisers are forming cosy relationships (and vice versa) with real estate agents to get SMSF deals up and running. Might all be legit, but it’s still pushing prices up to unaffordable status…unless you are a wealthy SMSF trustee of course.
This is a serious issue. Gearing for residential property in super should be banned.
There’s certainly a lot of damage being done by property spruikers who care more for a sale than the client’s strategy and wealth outcomes. Therefore, there’s also a great need, opportunity and, dare I say, responsibility for advisers to pro-actively advise on property if for no other reason than to marginalise the spruikers. Of course, there many more positive and profitable reasons to do so.
Therefore, my challenge to all levels of the advice industry is do much more than simply throw in grenades at parts of the property space but to choose, for your clients’ and own practice’s sake, to be an active part of the solution. If not, then you’re still only part of the problem. Over to you.
As a Financial adviser I already do what ASIC asks. Do accountants provide any written document when advising clients, do they explain that SMSF could be more expensive, do they reorganize the Insurance that is often lost?
Yet again the compliance is addressed to the licensed advisers and no action taken against a property marketer or accountant.
Government should get out of the way and allow private enterprise to do what it does best.
ASIC once again misses the real dangers, or ignores them. Property spruikers will do real damage, and once again after 000’s egt burned by these grubs, ASIC will “come down heavily” and over regulate the entire SMSF world. Public servants only know how to regulate not how to stop it in first place.
Given that SMSF “Advice” until recently has been provided by Accountants I’m not surprised. Id like to think that this is not being sheet-ed home to FPs who until relatively recently have not been in this space to the same extent. Just like FPs got tared with the MIS brush yet the bulk of that was Accountants doing. Get ready for a bit of blame shifting. Love the fact that Peter Kell still infers you can get the ‘tailored advice from your Accountant…”. What the….
With SMSF’s being required to go through all these hoops, its probably about time that ASIC asked the question why aren’t SMSF’s covered by the compensation requirements under SIS and made sure they do become covered under the compensation requirments. Then super is still super and not almost super.
Interesting. Pity won’t apply to all those practitioners not required to be licensed re SMSF’s for nearly 3 years ie: Tax Agents & Accountants. Close the net on the activity that’s been going on for years here (establishment with ‘no advice’) and this will bring some much needed progress to protect consumers.
About time