NAB signs up to SMSF advice guidelines
National Australia Bank has signed up to SPAA’s industry guidelines on limited recourse borrowing which aim to create a best practice standard of advice for SMSF trustees.
The guidelines propose to create a best practice standard of advice that should be provided to SMSF trustees considering the use of LRBAs if they elect to seek personal advice.
“Lenders are required to make a recommendation to the SMSF trustee that they seek appropriate specialist SMSF, financial and legal, advice in regards to their SMSF entering into an LRBA,” the guidelines stated.
“Obtaining such advice should help to ensure LRBAs are only being invested in by SMSF trustees after understanding the nature of the investment strategy and the risks associated with it.”
SPAA chief executive Andrea Slattery explained NAB’s adherence to SPAA’s practice guidelines will help ensure a responsible approach is taken to all LRBAs and lenders becoming involved in SMSFs.
“With NAB signing on and other major lenders in the pipeline, the government and regulators can have a high degree of confidence that LRBAs are being used appropriately,” said Ms Slattery.
She added that the guidelines focus on ensuring LRBA lenders adhere to best practice guidelines.
The lenders' guidelines emphasise the importance of lenders providing SMSF trustees with factual information from a qualified specialist on what LRBAs involve and the possible scenarios associated with them.