A key superannuation group has pointed to the development of commercial relationships between accountancy firms, real estate agents, mortgage brokers and lawyers as posing a genuine risk to the provision of good advice with respect to establishing self-managed superannuation funds (SMSFs).
The Association of Superannuation Funds of Australia (ASFA) has raised the issue in a submission to Treasury dealing with the new licensing arrangements replacing the so-called accountants' exemption, which also calls for tighter controls.
Pointing to the ability of SMSF trustees to borrow money through limited recourse loans to purchase property assets, the ASFA submission warned that because property was not regulated as a financial product, the commercial relationships between accountants, real estate agents, mortgage brokers and lawyers were potentially problematic.
As well, the ASFA submission said it was understood that the Financial Ombudsman Services (FOS) and law firms were increasingly being approached by people who should not have been advised to move from their existing funds into SMSFs.
"Because property is not regulated as a financial product under the Corporations Act, currently nowhere in these arrangements do we have an Australian Financial Services Licence (AFSL) and certainly no obligation in relation to best interest duty or disclosure of conflicts and remuneration," the submission said.
"The world has changed and SMSFs are part of the structure of the superannuation system. It is important that we strengthen the structure as a whole, not weaken it," the submission said.
The ASFA submission said that the new limited licensing arrangements for accountants appeared to impose no obligation on the accountant to assess whether or not a person was better off in an SMSF compared to their current fund or product.
