ASIC has released two information sheets to improve the quality of advice provided by advisers on
SMSFs.
The information sheets are intended to assist advisers comply with their conduct and disclosure obligations under the Corporations Act and outline what ASIC looks at when undertaking surveillance in this area. They specify the types of risks and costs that an adviser should consider, discuss and then disclose to clients when providing advice on establishing or switching to, an
SMSF.
The information sheets also deal with the cost-effectiveness of an SMSF, making clear ASIC's view that an SMSF with a starting balance of $200,000 or below is unlikely to be in the client’s best interests and that advice to establish one below that threshold is more likely to be scrutinised by ASIC.
“Setting up an SMSF is a significant financial step for consumers and many factors can impact their decision. It is therefore important that consumers receive good quality advice that will assist them in making informed decisions about their retirement savings,” ASIC Deputy Chairman
Peter Kell said.
“ASIC wants to ensure that only those investors for whom an SMSF is suitable are advised to establish an SMSF and that our expectations around the standards of advice are clear.”
According to Kell, SMSFs will be a key priority for ASIC, as it continues to target inappropriate advice about SMSFs in its surveillance work. The information sheets will provide compliance tips, which indicate the factors that ASIC is likely to look at more closely as part of its surveillance.
