As announced earlier this year, ASIC is currently conducting a major shadow shopping exercise in a bid to target unlicensed SMSF advice.
In emails seen by SMSF Adviser, it is clear ASIC has selected several hundred funds for random investigation that were set up in September 2016, and is contacting tax agents associated with the funds.
ASIC is asking if the clients of the tax agents received any professional advice about establishing their SMSF, and if so, that the contact details are passed on.
While ASIC is gathering details about both financial advisers and accountants as part of this project, it is understood that broadly, unlicensed accountants in particular are on the regulatory radar.
The information supplied to ASIC is treated as anonymous, but the general findings will be published in a report slated for the second half of this year, an ASIC spokesperson told SMSF Adviser.
ASIC could not outline any further details of the investigation, except to confirm that it is pursuing its “major” shadow shop as announced in February, and will be looking at random samples of SMSF advice.
Despite being relatively lax in the past to instances of accountants operating outside of the accountants’ exemption in particular, BDO’s national leader for superannuation, Shirley Schaefer, suggested ASIC will be taking no prisoners this time round.
“I suspect a lot of accountants have sat outside the accountants’ exemption for years, and ASIC never did anything about it in the past,” Ms Schaefer told SMSF Adviser.
She acknowledged that many accountants do not agree that the SMSF services they are providing fall into the financial advice category, an argument that is largely irrelevant in 2017.
“This is not just tax advice. I certainly believe [SMSFs are] a structure not a product, but that argument is gone. There’s no point having that one again. We’ve been there and it’s gone,” Ms Schaefer said.
How many accountants ever got busted by ASIC, for all the AFSL strategic advice provided way beyond the old accountants exemption = ZERO.
Until ASIC actually starts publically doing so, both unlicensed and licensed accountants will continue to provide huge amounts of AFSL advice with zero AFSL compliance.
Begs the question on the instigation of this, sounds like it has been the behest of the industry super funds who knew they couldn’t take on SMSF’s in regards to pricing or ‘best interests’ so have now had their Labor cronies to get their lackeys, Medcraft & Kell, to do their dirty work for them…
The day ASIC begins investigating the ISA funds for all the known reported inappropriate activities, expenditure and backroom deals with the unions , then they may have a measure of credibility. Until then they are as conflicted and biased as any other commercial organisation out there, or perhaps worse as apparently no one watches the supposed watch dogs.
It is irrelevant whether it is s structure or product. The issue is that the advice given directly impacts the wealth and health of investors (people). Too often this advice has led to poor outcomes for investors (people). This applies to products, shares, property, structures, bank deposits, investment schemes, etc. SMSF advice and Real Estate advice should be included under the regulatory regime. As limited as it is, it is still better than not attempting to improve outcomes for investors (people).
The law is still wrong to call a legal structure an investment product. ASIC should be focused on the underlying investments but those with the power have kept the blowtorch on SMSF’s instead of the Institutional or Industry super funds where public servants and politicians sow their seed and reap their administration fees acting as trustee directors. SBE are easy targets and there is no union backlash!
Very interested to read the findings of the ASIC research, but I do question the commentary supporting this news. On what basis does the author of this article and the commentator quoted, make the comments set out in quotes below?. Are these comments just a personal opinion, or are they backed up by evidence from ASIC? Not sure if the BDO commentator’s comments are constructive to the article.
How does she know that ASIC has been ‘relatively lax’?
How does she know that ASIC will take no prisoners
How does she know that ‘a lot of accountants’ have sat outside the exemption for years?
“Despite being relatively lax in the past to instances of accountants operating outside of the accountants’ exemption in particular, BDO’s national leader for superannuation, Shirley Schaefer, suggested this time ASIC will be taking no prisoners.
“I suspect a lot of accountants have sat outside the accountants exemption for years, and ASIC never did anything about it in the past,” Ms Schaefer told SMSF Adviser.”
So is ASIC still to be regarded as Noddy or are they waking from their sleep with common sense in mind?. ASIC needs to investigate accountants, mortgage brokers and their association with developers as there is a river of filthy money between these two crowds of “advisers”. If ASIC were to slam the door shut on this issue for the sake of sanity prevailing, it would classify property as an investment class much like equities, trap this under corporations law with an exemption for those buying property to live in. You can do a great deal of damage with geared property as you can with equities with bad advice. Being slightly pregnant on the issue of advice leaving carve outs for the real estate industry while pretending to be an enforcement agency is not the answer. DO this right ASIC. Yes go after shady accountants giving investment advice on property but also go after mortgage advisers who get kickbacks from developers, accountants who get kick backs from developers, developers who set up marketing agencies giving tax advice. Lets make BEST INTEREST enforceable across ALL types of ADVISERS. Otherwise, this is nonsense in action…..yet again from the regulator
And what about the accountants that have got a license or proper authority and still provide bucket loads of AFSL advice with zero AFSL compliance ? Because they have advised and set up contributions, super pensions, death benefit nominations, etc for too many years with zero AFSL compliance as they still think this is not financial advice.