ASIC contacts unlicensed firms, demands quick action
In recent days ASIC has been distributing letters to unlicensed accounting firms after analysing their advertising and corporate websites, requesting further details about their services and demanding a response explaining their SMSF services.
In these letters, ASIC quotes text from the website of the accounting firm and highlights particular terms such as SMSF set up and assistance which may suggest the firm is carrying on a financial services business when they are not licensed to do so.
The letter requests that the accounting firm provide ASIC with a written statement within 14 days outlining the details of SMSF-related services they provide clients.
Where the accountant feels they don’t need to be licensed, the letter asks the firm to provide a basis for this view.
“They suggest the accountant attach any legal advice they may have obtained to support this view,” Merit Wealth accountants services director David Moss, told SMSF Adviser.
Alternatively, if the accountant believes they need to get licensed, the letter asks the accountant to outline the steps they are taking to achieve this.
“The scary thing with this document is that it’s asking for a confirmation from the accountant in writing, if they believe they need to get licensed or not,” said Mr Moss.
While ASIC has the ability to impose fines of thousands of dollars on firms that advertise services they aren’t legally able to provide, he said it’s unclear at this stage if ASIC will go down this path with accountants.
“People shouldn’t ignore these letters. They need to act – the letter provides a two-week period to respond to ASIC. They’re not mucking around. You can’t put your head in the sand,” he warned.
“If someone doesn’t know where they stand, then they need to get some guidance and advice off other people as to what their options are and how they could proceed.”
Hayes Knight director and chair of Knowledge Shop, Greg Hayes said in some cases accounting firms may simply have not updated their website material to reflect the changes in the law.
“Some public pieces of information such as websites in some cases just haven’t been brought into line with the changes that are occurring. I think in the vast majority of cases it’s not deliberate intent,” said Mr Hayes.
“It’s one of those things that have been overlooked with the changes, [and these firms may] just have a website with a bit of updating to be done.”
This latest action from the corporate regulator follows an announcement by ASIC chairman Greg Medcraft earlier this year that ASIC would be using a machine learning software to search the web and identify misleading marketing, in particular sub-sectors, including unlicensed accountants and SMSFs.
It also follows a research program in which ASIC has investigated hundreds of SMSFs at random, on the lookout for tax agents who unlawfully provide SMSF advice.
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.