subscribe to our newsletter
Compliance risks flagged with LRBA bank documents

Compliance risks flagged with LRBA bank documents

Miranda Brownlee
24 October 2016

SMSF professionals need to carefully review bank documents for borrowing arrangements before signing them as they could be breaking the law, warns a boutique financial services company.

Merit Wealth accountants services director David Moss says when clients are in the process of entering limited recourse borrowing arrangements, the bank will usually ask the accountant or adviser to sign a certificate which states they have given the client financial advice.

While unlicensed accountants may be able to sign off on certain certificates because of the way the certificate has been worded, there are plenty that could place unlicensed accountants at risk of providing unlicensed advice.

“Some of these certificates say, ‘I have given you financial advice’ and you’d be breaking the law by signing that document if you weren’t licensed,” Mr Moss said.

He warned that even licensed accountants need to be checking for any “tricks and problems” associated with the wording of these documents.

“With some of these certificates, you’ll need to do a statement of advice for the loan simply because in the wording of the document it says I have given you advice and provided you with a statement of advice”.

“So if you’re signing documents saying that you have provided a statement of advice, then you better give a statement of advice.”

Compliance risks flagged with LRBA bank documents
smsfadviser logo
join the discussion

Do your clients plan to add additional members to their SMSF if the new six member limit is passed as law?

SUBSCRIBE TO THE
SMSF ADVISER BULLETIN

Get the latest news and opinions delivered to your inbox each morning

In this month's issue:

  • Time wrap
  • The tech bull run
  • From hobby to passion
  • Golden Years
  • An untimely reminder
  • Why change is so difficult
  • Key Strategies for equalising super