Restricting SMSF property advice to financial planners and accountants is the only way to protect clients from poor advice, said Reece Agland, superannuation products and services manager at Superannuation Australia, a subsidiary of Taxpayers Australia.
“While ASIC has been cautioning property advisers and others that they might be in breach of the financial services law, the true position of the law remains clouded,” Mr Agland said.
“The law should be strengthened to specifically say that property investment advice in an SMSF is financial advice and requires licensing. Accountants should have their existing exemption expanded to allow them to give property advice, until their exemption expires in 2016.
“We need… concrete action. Clients need to know that the people that are advising them are reputable and have the knowledge to back up what they are saying.”
Mr Agland added that only practitioners who are “properly trained” should be providing SMSF trustees with advice in relation to property investment.
“Both financial advisers and accountants are subject to rigorous requirements in relation to their education to advise clients about SMSFs. Licensed advisers are also subject to ASIC regulation and in particular the best interest duty,” Mr Agland said.
“Accountants are the trusted advisers to SMSF trustees and are subject to professional standards and must have professional indemnity insurance. Trustees can rely on them to provide advice and be covered by consumer protection mechanisms. The same cannot be said of other advisers.”