Last week ASIC revealed the findings of its taskforce into SMSFs, with focus on poorly-given advice and the danger of property spruikers. SPAA CEO Andrea Slattery said that while SPAA welcomes the report, “the limited nature of the report means not too much should be read into it”.
ASIC investigated 100 pieces of advice provided to low-balance (less than $150,000) SMSFs. The regulator found “pockets of poor advice”, including:
advice not sufficiently tailored to the needs of the investor
replacement product disclosure absent or inadequate
insurance recommendations absent or inadequate
an inappropriate single asset class was provided to investors
suitable alternatives to an SMSF were not considered
inadequate consideration of the investor’s long-term retirement planning objectives.
The report also focused on the proliferation of property spruiking and expressed concerns about the increased advertising of buying property through SMSF.
Slattery said, “This is a very small subset of SMSF advice, only addressing the really risking end of advice to the SMSF industry.
“What has to be remembered is that there are nearly half a million SMSFs so this research should not be regarded as defining all professional advice in the SMSF space.”
She said the information would still be useful in determining the risks that ASIC sees to watch out for, and for SMSF advisers to understand what the regulator expects of them. “The report also shows that consumers should seek SMSF Specialist advice to ensure that they are getting the best quality advice best suited to their individual circumstances,” said Slattery.
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