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April 22, 2013

ASIC reviews quality of SMSF advice

ASIC has released Report 337 SMSFs: Improving the quality of advice given to investors (REP 337).

The report summarises the findings from ASIC’s Self-managed superannuation fund (SMSF) taskforce's review of the quality of advice given to SMSFs by financial planners and accountants.

ASIC conducted a review of over 100 investor files relating to the establishment of an SMSF that were provided by financial planners and accountants. The files targeted were considered to be in higher risk categories through, for example, having lower balances or less diversified investments.

While most advice provided was rated as adequate ASIC found issues in the following areas:

  • advice was not sufficiently tailored to the needs of the investor
  • replacement product disclosure was absent or inadequate
  • insurance recommendations were absent or inadequate
  • an inappropriate single asset class was provided to investors
  • suitable alternatives to an SMSF were not considered, and
  • there was inadequate consideration of the investor’s long-term retirement planning objectives.

ASIC’s report contains a number of practical tips advisors can use to improve the quality of SMSF advice.

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Posted 22nd April 2013 by David Jacobson in Corporations Act, Superannuation