ASIC releases guidance on SMSF advice

ASIC releases guidance on SMSF advice

ASIC has released two information sheets to help advisers improve the quality of advice provided on self-managed superannuation funds (SMSFs).

The information sheets are:

• Information Sheet 205 – Advice on self-managed superannuation funds: Disclosure of risks (INFO 205); and
• Information Sheet 206 – Advice on self-managed superannuation funds: Disclosure of costs (INFO 206).

They specify the types of risks and costs that an adviser should consider, discuss and then disclose to clients when providing advice on establishing, or switching to, an SMSF. The information sheets also deal with the cost-effectiveness of an SMSF, making clear ASIC’s view that an SMSF with a starting balance of $200,000 or below is unlikely to be in the client’s best interests, and that advice to establish one below that threshold is more likely to be scrutinised by ASIC.

ASIC Deputy Chairman Peter 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. “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. “SMSFs are a key priority for ASIC and we will continue to target inappropriate advice about SMSFs in our surveillance work”.

To that end, the information sheets provide ‘compliance tips’ which indicate the factors that ASIC is likely to look at more closely as part of their surveillance activities.

Ref: ASIC website

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