ASIC focuses on SMSF one-stop shops
The Australian Securities and Investments Commission (ASIC) has declared it is taking another look at the self-managed superannuation funds (SMSF) sector - this time with respect to the use of "one-stop-shop" models traversing SMSF establishment and property investment.
The ASIC focus was confirmed by the regulator's deputy chairman, Peter Kell (pictured), who said it had recently started taking a closer look at the potential risks associated with the one-stop-shop model.
"Now, there may be benefits for the consumer in being able to access a number of services under one roof. However, we are keen to ensure that advice is not compromised as a result and that consumers are not misled into believing they are getting a certain level of advice, where they may only be referred to another part of the business to be sold one product," he said.
Kell said that while credit assistance providers operating outside such one-stop shop arrangements might consider that the issues raised in relation to SMSFs did not directly impact on them, the limited recourse borrowing arrangements for SMSFs were much more complex than a normal home loan - and credit assistance providers therefore needed to be aware of the additional risks associated with such transactions.
He said that, broadly speaking, the risks in such transactions included breach of credit legislation and inadvertently providing unlicensed financial advice.
Kell pointed out that ASIC had previously cancelled a credit licence and banned its director from engaging in credit or financial services due to a number of concerns, including the provision of unlicensed SMSF advice.
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