As part of ASIC’s surveillance on SMSF Advisers Network (SAN), ASIC reviewed a number of SAN’s client files. The review identified concerns including that some of SAN’s advisers had failed to demonstrate compliance with the best interests duty and related obligations.
ASIC found that the statement of advice (SOA) documents relied heavily on templated wording and many of the client files lacked evidence to support the advisers’ recommendations that clients establish a SMSF.
As a result, ASIC was concerned that SAN had inadequate supervision processes in place to ensure that advice provided by its representatives was in the best interests of clients.
“The additional licence conditions require SAN to engage an independent expert to review and test the compliance of advice provided by SAN’s advisers and to assess whether SAN has appropriate supervision mechanisms in place to ensure that its advisers are meeting the best interest duty and related obligations,” ASIC said.
“Where shortfalls in supervision arrangements are identified, the independent expert will make recommendations to address the deficiencies.”
ASIC said AFS licensees are responsible for the conduct of their representatives, and expects them to have adequate supervision arrangements in place to ensure that their representatives comply with the law when providing financial product advice to consumers.
Further, it said it is essential that AFS licensees’ resources remain adequate, especially during periods of strong growth, to ensure compliance with their obligations, that ASIC will continue to monitor movements in adviser numbers when targeting future surveillance work.
“When providing SMSF advice, financial advisers are required to adequately demonstrate why an SMSF is appropriate for the client and why it is in the client’s best interests. ASIC expects financial advisers to use their skills, expertise and judgement in determining whether an SMSF is appropriate and not rely solely on client direction,” ASIC said.
SAN is doing better than CPA…LOL!!
Time is up for limited license – impracticle for an accountant be a financial adviser as well given the requirements of both roles. The costs and CPD of being a limited authorised representative will prove too onerous.
This would upset our resident troll accountant who keeps attacking advisers and is out of control. He thinks he is in the mile high club compared to us
Knowing three accountants who went with them and the exceptionally limited documentation they were told was needed for an SMSF SOA the only surprise with this action by ASIC is it took so long and is so weak. The two accountants that remain with them will now need to do what the other one of the three did and establish all their SMSF’s as execution only as this seems to be something ASIC is incapable of understanding is happening.
Accountants at it again! Is there really a space in the Fin Planning Industry for these cowboys.
Why issue limited licences? The horse has bolted, this SMSF gravy train for the accountants has been going on for as long as i can remember. Vertical integration at its best within these practices. ASIC you should have know that this was the consequence. Unbelievable@
Well that’s interesting. SAN is owned and operated by the NTAA (National Tax & Accountants Association) and their tag line is “The SMSF Advisers Network (SAN) is an Australian Financial Services Licence (AFSL) designed by accountants for accountants to give NTAA members the simplest way to advise their SMSF & Superannuation clients”. And to make it more appealing to accountants – it only costs $250 PER MONTH (exc GST) for 1 AR!!! How good is that!!! Now I’m sure there are a handful of accountants licensed by SAN who understand and adhere to the stringent requirements to which fully licensed advisers must abide, however the vast majority of accountants will CONSISTENTLY FAIL BID because they’ve never had to document the research required to support the recommendation for a client to setup an SMSF. The ‘advice’ is usually provided verbally so there’s NO paper trail. If ASIC reviewed more files from SAN ARs I’m sure they’ll find that the vast majority of SoAs will say that the recommendation to establish an SMSF was at the client’s request/direction. #BIDFAIL
No surprises here, pretty confident also that nothing will change. Here is the standard meeting:
“Would you like Fries and a SMSF deed with that Tax return Mr Consumer.” Said the Accountant during the 15 minute tax return meeting. If yes…. hit print and an SoA is generating saying “take control”, client picks it up at reception and the Accountant moves onto the next client who is already in the reception. Job done.
They need to Accountant profession under the microscope as this profession has been getting away with to much for to long. I applaud ASIC going after accountants and its about time. They will find many major issues.
From the SAN website, and if I’m an accountant I can even apply online.
“Are you an Accountant looking to advise on SMSFs and Superannuation?”
Guessing they aren’t really financial advisers..
Are they financial advisers or accountants with limited licenses to setup SMSFs without authority to advise much more? How did you not expect their advise wouldn’t meet BID?