The Australian Securities & Investment Commission (ASIC) has stepped up their efforts to improve quality of advice given to people with self-managed super fund
The watchdog yesterday released two information sheets intended to help SMSF advisers comply with conduct and disclosure obligations defined in the Corporations Act.
ASIC deputy chairman Peter Kell said the information sheets provide advisers with a number of “compliance tips,” which indicate the areas of the SMSF industry ASIC is likely to investigate.
According to the sheets, ASIC closely monitors whether advisers notify clients that moving to a SMSF means they do not have the same government protections and resolution mechanisms that come with a standard super fund.
Insurance is another area that will be monitored, with ASIC concerned advisers are not arranging the appropriate total and permanent disability cover for clients.
A major point covered by the information sheets is whether a SMSF is the best option for an individual, with ASIC preferring SMSFs are only opened by people with a starting balance of more than $200,000.
ASIC believes the costs of establishing and operating an SMSF with a balance of $200,000 or below are unlikely to be competitive, compared to a regular super fund and would be more likely to investigate the advice given to a person who opens a fund with a starting balance below that mark.
“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,” Kell said
“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.”
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