ASIC changes SMSF focus to “one-stop” shops

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ASIC has started taking a closer look at the potential risks associated with one-stop shop business models that provide advice on SMSFs.

In a speech to the Mortgage and Finance Association of Australia (MFAA), Kell said that until now ASIC’s main focus has been on the financial advice given to consumers about the establishment of an SMSF.

“However, we have recently started taking a closer look at potential risks associated with one-stop business models that provide advice on and assist in establishing SMSFs, sourcing and purchasing of investment properties, and obtaining finance for property purchase,” he said.

And although there may be benefits to the consumer in being able to access a number of services under one roof, ASIC is concerned that consumers could be misled into believing they are receiving a certain level of advice, where they are actually just referred to another part of the business to be sold a product.

Kell specifically warned against inadvertently providing unlicensed financial advice, particularly within limited recourse borrowing arrangements for SMSFs, because in some instances recommendations about SMSF investment may trigger financial service licensing requirements.

He said that limited recourse borrowing arrangements for SMSFs are much more complex than a normal home loan, and providers need to be aware of the additional risks associated with such transactions.

“ASIC has previously cancelled a credit license and banned its director from engaging in credit or financial services due to a number of concerns, including the provisions of unlicensed SMSF advice,” Kell said. 


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  • viewsxew on 15/05/2014 3:34:02 PM

    This ASIC concern is consistent with the report in another publication from Key Media in the past couple of days: in that article the regulator was concerned about insurance products being available as an add-on to a mortgage broker's services.

    That article prompted a question as to whether ASIC might eventually line the Banks up for their one-stop shop approach with bank customers being whisked in to their financial planners and to their personal risk insurance 'agents'.

    Is there more to come?

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