In an address to a financial adviser event, Alan Kirkland, Australian Securities and Investments Commission (ASIC) commissioner, said the regulator will be reviewing client advice files where self-managed super fund (SMSF) establishment advice was provided to assess compliance with the best interests duty and related obligations.
“We’re also reviewing information from licensees about their oversight and the application of their policies and procedures in the context of SMSF establishment advice,” Kirkland said.
“I expect that we’ll release the findings from this work in the second half of this calendar year.”
Kirkland said ASIC is continuing to see too many examples where advice leads to poor, if not devastating, outcomes for consumers.
“Our ongoing investigation into the Shield Master Fund is one such example, though regrettably it’s not an isolated one. It reflects a pattern of conduct we are seeing all too frequently,” he said.
“This pattern commonly involves telemarketers recruiting consumers before passing them onto advisers. These advisers then recommend that consumers withdraw their superannuation savings from a regulated fund and invest them, sometimes via an SMSF, into a high-risk property scheme or some other high-risk investment.”
He added that ASIC deputy chair Sarah Court described some of this misconduct as occurring “at industrial scale”, which can result in the significant erosion – or complete loss – of a person’s retirement savings.
“While there is often a complex web of individuals and entities involved, inappropriate or poor-quality advice typically plays a pivotal role in the ultimate consumer outcomes,” he said.
Kirkland said one of ASIC’s strategic priorities in 2025 is in providing better retirement outcomes and member services, which includes not just its work on member services for members of super funds, but also a focus on entities and individuals involved in the provision of advice.
“Besides our strategic priorities, we also have enforcement priorities, which are announced annually. And these target specific forms of misconduct that are of serious concern to ASIC,” he said.
“Over the coming year, you can expect, through those priorities, to see a sustained focus on advice-related misconduct. The priorities for 2025 will include misconduct exploiting superannuation savings and unscrupulous property investment schemes.”
He concluded that ASIC’s work in this area won’t be limited to superannuation trustees or responsible entities of managed investment schemes but will include a broad range of entities involved in conduct causing harm to consumers and investors, including advisers and licensees.
Kirkland had previously said the corporate regulator would continue its cold-calling and inappropriate super switching campaign, calling it the “worst behaviour” ASIC has seen.
Speaking at FINSIA’s The Regulators event in November, the ASIC commissioner said that “challenging economic environments always create opportunities for people selling snake oil”.
“The worst behaviour that we see is practices that start with telemarketing or clickbait ads on social media that encourage people to get involved in a review of their superannuation,” Kirkland said.
“They’re often in a well-performing, prudentially regulated fund, and they’re told it’s terrible and they should tip their money either into a platform product or into SMSF, with most of their super then ending up being invested in, say, a high-risk property scheme.
“So, we’ve got some significant action underway against those types of practices, but they’re obviously an enormous concern, because it’s people’s super that’s at stake, and in the worst cases, if it’s invested in some sort of cryptocurrency investment, it often just disappears overnight.”
Maybe ASIC could focus it’s attention on the Super Sector….because if you take two years to payout a death benefit to a widow, or weeks and weeks for a withdrawal…. or a a third party authority that expires more times than I change my underpants, I’m pretty sure you wouldn’t want to be recommending some Industry funds.
About 5 years too late Keystone Cops that boat has sailed go chase the unlicensed sector causing the current mess…
Financial advisers know their obligations and comply with them. ASIC will do well to focus on those who aren’t authorised to provide advice on SMSF (or super in general) but who introduce the idea and walk client through it anyway. It is very disheartening when I come across a new client who has ‘signed-on’ with a property spruiker and the outcome is not in their best interests. Shut down unlicensed persons from speaking about topics they have no business discussing.
Ask Alan what the AFCA stats say about advice-related misconduct. I believe the recent statistics show it was very low.
Alan should be targeting unlicensed SMSF set ups, ie. Accountants, Property Spruikers, and the cheap online setup services which offer quasi advice. While he is at it he could target call centres whom usher people into these schemes, plus the scammer callers. The results of this would be far, far greater than simply targeting Advisers which will result in even more compliance.
This just seems like Alan is out on a fishing expedition to do whatever he can against Advisers, whilst supporting his mates in Industry Super.
Typical ASIC nonsense. This is what I get out of this article:
1. Advisers are once again white-anted by the regulator with examples of extreme cases which almost entirely have nothing to do with properly licensed financial advisers;
2. ASIC view any advice which involves a rollover form an industry fund to a ‘platform product’ as an act of evil;
3. The truth is irrelevant when it comes to their biased agenda, as the number of ‘platforms’ which contain ‘high-risk property scheme(s)’ is almost certainly ZERO.
4. ASIC are still oblivious to the shifting sands, which now sees many of the biggest industry funds significantly underperforming their respective indexes.
5. ASIC’s love affair industry funds knows no bounds, despite the continuing mislabeling of investment options, disgraceful life insurance practices and dubious valuation methods for unlisted assets.
Every dud SMSF I see is from an accountant on direction from the client. Of course ASIC won’t do anything about this because they are …..
But the incoming Liberal government wants accountants to give advice again god help us!
WTF – Advisers are licenced to provide advice and are upheld by FASEA, Corps ACT, ATO guidances, RG guidances, what about accountants, cold callers and the rest of them!?
There was an article a few weeks ago about AGAT and VentureEgg. I’m sure ASIC is targeting both – this was just an adviser event.
If *some* advisers weren’t complicit, it becomes a lot harder for clients to get an SMSF. (Though some accountants are also worth watching.)
All accountants before advisers they’re conflicted in generating admin fees
Of course fund members don’t go direct & do it themselves, do they? lol. Perhaps one reason members set up low cost SMSFs is because they’re tired of the ATO rolling their super funds to the ATO without their permission.
What amazes me is that ASIC is targeting the the advisers, when most of the issues are manifesting our of UNLICENSED cold callers. When is ASIC going to deal with these serious breaches of 911c “holding out to be a financial services licensee”. How about locking these clowns up and shutting the related companies down.
Are they reviewing accountants?