ASIC on Mon 16.9.2013, released proposed guidance to improve the quality of SMSF advice given to investors. It said its recent review of the SMSF sector found there was a need to improve disclosure information that may influence a decision to establish or switch to an SMSF. As a consequence, ASIC said it has released Consultation Paper 216: Advice on self-managed superannuation funds: Specific disclosure requirements and SMSF costs (CP 216), which proposes specific disclosure obligations on advisers.
Specifically, the Consultation Paper includes the need for advisers to warn clients that SMSFs do not have access to the compensation arrangements under the SIS Act in the event of theft or fraud, and explain other matters which may influence a decision to set up an SMSF. In addition, it also looks at the appropriate level of resources consumers should have before setting up an SMSF, based on a Rice Warner report on the costs of operating SMSFs.
Source: ASIC media release 13-243MR, 16 September 2013
[LTN 179, 16/9/13]
ASIC Commissioner on SMSF advice and disclosure requirements
ASIC Commissioner Greg Tanzer on Tue 17.9.2013, spoke at the National SMSF Conference 2013, hosted by the Institute of Chartered Accountants Australia. Among other things, Mr Tanzer discussed the release on Mon 16.9.2013, of Consultation Paper 216 Advice on self-managed superannuation funds: Specific disclosure requirements and SMSF costs (CP 216).
Mr Tanzer said ASIC is proposing to modify the law, by way of class order, to impose specific disclosure requirements on AFS licensees and their authorised representatives who give personal advice to clients on establishing or switching to an SMSF. Key disclosures include: the duties and obligations associated with running an SMSF, the risks associated with running an SMSF, and the need to develop and implement an appropriate investment strategy for an SMSF.
Mr Tanzer also noted that ASIC is proposing to require AFS licensees and their authorised representatives to provide these disclosures to clients: where an SOA is the means by which the advice is given – in the SOA itself; and where an SOA is not the means by which the advice is given – at the time the advice is provided, and in the SOA when it is later given to clients.
[LTN 180, 17/9/13]