POWERED BY MOMENTUM MEDIA
SMSF advice may fail on long-term objectives
The Australian Securities and Investment Commission (ASIC) has said that self-managed super advice may fail to consider an investor's long-term retirement planning objectives.
ASIC commissioner Peter Kell said the regulator was cracking down on the SMSF space because it had become more significant to Australian investors and because the decision to establish an SMSF involved taking greater personal responsibility for 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 through an adviser or accountant, focusing on higher risk categories.
It found that while most advice provided was adequate, pockets of poor advice did exist.
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 often absent or inadequate.
Kell said ASIC had also 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 bid to ensure SMSFs are not pushed on unsuitable clients.
"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.
AUTHOR
Staff Writer
Money Management staff writers are writers who contribute to the website from time to time. If you would like to discuss the content contained within this article please contact us.
Recommended for you
The future of superannuation policy remains uncertain, with further reforms potentially on the horizon as the Albanese government seeks to curb the use of superannuation as a bequest vehicle.
Superannuation funds will have two options for charging fees for the advice provided by the new class of adviser.
The proposed reforms have been described as a key step towards delivering better products and retirement experiences for members, with many noting financial advice remains the “urgent missing piece” of the puzzle.
APRA’s latest data has revealed that superannuation funds spent $1.3 billion on advice fees, with the vast majority sent to external financial advisers.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
93.34 3 y p.a(%)
2
Global X GlobalX FANG+ ETF
36.96 3 y p.a(%)
3
GAM LSA Private Shares AU I
34.22 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
29.68 3 y p.a(%)
5
VanEck Video Gaming and eSports ETF (AU)
28.89 3 y p.a(%)
