Long-term oversight on SMSF advice says ASIC

The Australian Securities and Investment Commission (ASIC) has said that self-managed super fund (SMSF) advice may fail to consider an investor's long-term retirement planning objectives. 

  ASIC commissioner Peter Kell said it was cracking down on SMSF advice because of the significance of the market and the added personality responsibility SMSFs had over their investments

  "ASIC therefore wants to make sure those investors can be confident they can obtain good quality advice through gatekeepers such as accountants and financial planners," Kell said. 

  ASIC's SMSF Taskforce reviewed 100 investor files relating to the establishment of an SMSF on the advice of a planner or accountant, focusing on higher risk categories. 

  Although most advice provided was adequate, pockets of poor advice did exist, it said, including inadequate consideration of an investor's long-term retirement planning objectives. 

  Advice was not sufficiently tailored to the needs of the investor and there was inadequate consideration of an investor's long-term retirement goals, ASIC said. 

  It also found that replacement product disclosure and insurance recommendations were absent or inadequate. 

  Kell said ASIC had found that an inappropriate single asset class was provided to investors while suitable alternatives were not considered.  

The review represents ASIC's SMSF Taskforce's first major project in its crackdown on the SMSF space. 

  "ASIC does not want to see an influx of trustees who are ill-equipped to cope with the responsibilities and obligations of running an SMSF, and SMSF investors receive good quality advice and services from gatekeepers," it said. 

  Kell said ASIC was particularly concerned with aggressive marketing tactics of some advertisements in pushing property purchases through SMSFs.

AMP SMSF head of policy and technical, Peter Burgess said the 28 per cent of advice considered inadequate highlighted the need for SMSF trustees to seek an advisers with specialist SMSF skills and training.

He said advice was just one piece of the SMSF journey with adequate administration also necessary.