AMP responds to ASIC SMSF crackdown

AMP issued a submission to ASIC earlier this week in response to Consultation Paper 216 – Advice on SMSFs: Specific disclosure requirements and SMSF costs (CP216).

CP216 proposed that when recommending an SMSF, an adviser’s SOA should contain specific disclosures about the responsibilities of a trustee and the commitment required to operate an SMSF.

However, AMP stated it may be “more efficient and effective” for the generic disclosure items listed in the consultation paper to be provided as a standalone document, leaving the SOA to deal with client-specific issues.

“Most of the items listed are factual information and, at best, general advice about the costs and implications of setting up a SMSF,” the submission stated.

“Rather than each licensee developing their own commentary on these issues, ASIC and the ATO in conjunction with [industry bodies] could develop a user-friendly publication or booklet that must be provided to clients upfront.”

“In practice, many advisers already disclose the items listed in the consultation paper in that manner. That is, generic information is provided to the client by providing access to ATO support material and disclosures which are more client-specific are included in the SOA.”

“Therefore, rather than modifying the law to require the mandatory disclosure of those items, we think a Regulatory Guide which provides guidance on the appropriate disclosure of the benefits, risks and costs of setting up and running an SMSF specific to the client’s circumstance, would be an appropriate regulatory response.”

AMP also stated a 12-month transition period for any changes would be “more appropriate” than the corporate regulator’s suggestion of six months, indicating the industry in general is still trying to “come to terms” with FOFA.