SMSF advice focus part of ASIC’s corporate priority plan
ASIC will continue to focus on retirement outcomes as part of its four-year corporate priority plan, specifically on protecting consumers as they plan and make decisions for retirement with a focus on super products, financial advice and investment management.
Leah Sciacca, senior executive leader, financial advice and investment management for ASIC, said the commission is responding to key trends and emerging issues in the regulatory landscape where there are major shifts across sustainable finance, the digital and data economy, and an aging population.
“Superannuation is a key determinant of economic well-being for Australians in retirement and the superannuation system is designed to provide income to members of the Australian community when they retire,” she said.
“The SMSF sector represents a large proportion of the overall superannuation industry with around $180 billion in assets in December last year and although most SMSFs do the right thing, it is of significant concern that some individuals might consider or be persuaded to consider that SMSFs offer an opportunity to access superannuation savings early and illegally.”
Ms Sciacca said ASIC will continue to act when it sees this conduct and said accountants, financial advisers and other SMSF professionals have a key role to play in addressing this problem.
To achieve its priorities, Ms Sciacca said ASIC will undertake a range of strategic and enforcement work – one of which is a review of SMSF advice.
“As we know setting up an SMSF is a significant step and may have serious consequences for consumers, particularly their retirement savings and also insurance cover,” she said.
“We think SMSFs are suitable for some but not all consumers, and financial advisers must use their professional judgment to consider the broad range of relevant factors to ensure SMSFs are established only when it is suitable for the unique objectives and circumstances of the individual.”
She said ASIC has previously undertaken SMSF advice thematic surveillance and it remains an area of interest, as does observing incidences of inappropriate SMSF advice in past reviews.
“We have in our enforcement work seen some examples where SMSF consumers have been exposed to financial adviser fraud and dishonesty, sometimes also involved in borrowing and related to property purchases,” she said.
“In December 2022, we published information sheet 274 with tips for beginning an SMSF which replaced and consolidated previous information sheets. The overarching objective of the new information sheet was to help financial advisors, licensees and their representatives comply with the obligations.”
This year she said ASIC will review a sample of SMSF establishment advice given since the release of those sheets to assess the quality of the advice as well as continue pro-regulatory work with the ATO responding to poor practices in the SMSF sector, including sharing information about potential misconduct.
Concerning its focus on SMSF auditors, Ms Sciacca said ASIC will also continue to ensure that the SMSF auditors it registers perform their duties and obligations adequately.
“To achieve this we're continuing to work closely with the ATO as the current regulator on the 4341 registered SMSF auditors. As a result of referrals from the ATO we have deregistered 14 SMSF auditors and imposed conditions so far this financial year,” she said.
Finally, in relation to ASIC’s enforcement activities for 2024, Ms Sciacca said ASIC will maintain its focus on the super sector, which will include issues involving SMSFs.
“There is an opportunity for SMSF auditors, advisers and the industry as a whole to work closely together to identify and address issues faced by people choosing to put their money into SMSFs,” she said. “By prioritising their needs and ensuring high service standards, we will be helping Australians achieve better outcomes in retirement.”
