Although ASIC has been understood to be “a little lighter” in terms of enforcement at the beginning of a new regime, an ASIC spokesperson told SMSF Adviser that accountants who act illegally come 1 July “are as much as risk of enforcement action as anyone else”.
This echoes ASIC commissioner Greg Tanzer’s approach to enforcement of the new licensing regime for accountants earlier this year.
“Frankly, if you decide after 1 July to give advice on establishing or operating an SMSF and you don’t have the requisite licence, where you’re not operating under a licence for someone who does, you’re acting illegally. Then you’re joining the club with the investment scammers, the property spruikers, and all of the other people who choose to operate illegally.”
Yesterday, ASIC released its enforcement report for the period of 1 July 2015 to 31 December 2015, which also outlined areas of focus for the rest of the year.
In the report, ASIC noted superannuation is driving change in the structure of Australia’s financial system, and vowed to focus on responding to poor financial advice affecting retirement savings.
The ASIC spokesperson also told SMSF Adviser that the regulator will continue to make SMSFs an “ongoing focus” of its enforcement work.
The spokesperson said ASIC continues to see conduct targeting SMSFs, including unlicensed financial advice, often in combination with property spruiking, inappropriate investment strategies, aggressive advertising and fraud.
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[quote name=”AJ”][quote name=”Keith”]Lets just remember it was financial planners who got most of the clients into financial difficulty because of the commissions they ‘earned’.[/quote]
Haha, sure, and it wasn’t accountants getting clients into financial difficulty through Agriculture/Tree schemes and the commissions they “earned”? Please…!!
The number of inappropriate SMSF’s I’ve seen set up by accountants on behalf of a property spruiker who paid them a big cut is enormous![/quote]
Haha AJ couldn’t agree more.
I work with some fantastic Accountants and appreciate how much value a good Accountant can add but lets also identify there is plenty of undocumented, inappropriate advice being provided.
There are good and bad accountants, just like there are good and bad financial planners… Thing is soon we will all be on a level playing field.
[quote name=”Keith”]Lets just remember it was financial planners who got most of the clients into financial difficulty because of the commissions they ‘earned’.[/quote]
Haha, sure, and it wasn’t accountants getting clients into financial difficulty through Agriculture/Tree schemes and the commissions they “earned”? Please…!!
The number of inappropriate SMSF’s I’ve seen set up by accountants on behalf of a property spruiker who paid them a big cut is enormous!
Most professional accountants make notes of any discussions they have with clients. Be it phone or accross a desk. If the later, i generally give the client a copy of my notes. That would prove what I said and recommended. So that is another furphy. Lets just remember it was financial planners who got most of the clients into financial difficulty because of the commissions they ‘earned’. The comment sounds like it was meant to create a discussion on what is general comments and what constitutes advice. How wealtthy is the client? What will the Turnbull Givt changes be? Just a lot of hot air guys!!!
I work closely with a group of accountants. I recently had one client call me after he had been speaking to the accountant about a few matters. He told me that the accountant had recommended he (the client) look to have 3 properties in his SMSF by the time he retires. I said “Did he now…” And was told “Yep, yep, he reckons its a great strategy”. I walked into the accountant and said “what have you been talking to Bill about?” and relayed the conversation regarding the property strategy. He says he recommended no such thing and that it was the client that raised the prospect of 3 properties. But as KCA says, ASIC/FOS/etc will take the side of the client on 90% of occasions. The client only had one conversation with an accountant, whereas the accountant has dozens with clients every day. Who do you think they will believe has the better recall of events?
GeorgeVC agree but the flashpoint is how ASIC defines providing “factual information” vs advice/recommendation. I suspect what a majority in the accounting profession see as “factual information” ASIC is itching to call advice/recommendation. They seem keen to take view that if client says “my accountant recommended I set up a SMSF” equates to the perfect proof you did. Reality and no amount of signed disclaimers to the contrary will matter to them. They need this to be the case otherwise what are these reforms for? They are also itching to say if an accountant sets up quite a lot of SMSF’s this cannot be “execution only” but again powerful proof of advice/recommendation.
I suspect ASIC will also play the $10,200 fine game. Pick a small firm for supposedly recommending then say this can all go away if you pay $10,200 fine and we get to do a press release we cracked down on you. Small firm faced with legal fees far in excess of $10K to fight so they reluctantly roll over.
By GeorgeVC you areuth correct about accountants continuing to be able to provide factual advice along with the SMSF accounts and auditing.
No oneth is arguing this.
But beforith you charge into battle for all the SMSF work accountants can still do, just be very awareuth of all those accountants that providith bucket loads of AFSL SMSF advice with zero AFSL compliance.
This by GeorgeVC is the problem and if accountants want to keep providing this AFSL advice then they will have to jumpith through all the AFSL compliance hoops.
I have no problem with Tanzers comment when targeted at rogues who are likely already doing the wrong thing or at ones that are driving business models to develop a SMSF business. The converse position however is that a large number of practitioners providing a significant number of the services across the country do not fit these moulds. They are diligent professionals sevicing their existing clients needs. Not broad brush promoting SMSF. Mr Tanzer and journalists need to be more circumspect in commentary with clearer distinction of what types of activities are in the firing line. Else wise we end up with this time wasting conjecture which does little to enhance the ultimate goal of having clients interests competently and professionally managed.
Mr Tanzer made this comment earlier this year about accountants not being able to provide advice on “how to operate” a SMSF. It creates a huge misconception that SMSF trustees must appoint a financial planner. They dont. The only mandatory appointment is the auditor. Trustees are not even required to appoint an accountant.
But post 1 July 2016, an accountant without a licence can still provide factual advice on SIS compliance, taxation advice, SMSF accounting services, auditing, & execution only services as the smsf trustee instructs.
The vast majority of SMSF trustees dont want FP recommendations, but guidance & expert advice on how to understand & use the SMSF that Australian law allows them to have, to be self directed on investments & operate within the plethora of rules.
Accountants can continue to provide “factual advice” & “execution only” services post 1 July 2016 without licensing, as long as they dont make recommendations.
What an insult to professional accountants. With all the stuff ups, non action on Financial Planners, banks etc. by the ASIC, to threaten professional accountants is low behaviour.