CA ANZ proposes accountants’ inclusion in SMSF advice regime
CA ANZ said it doesn't believe wholesale reform of the rules about setting up and running an SMSF is necessary until there has been further analysis of the ATO data and its ongoing early-release strategies.
Tony Negline, CA ANZ superannuation and financial services leader, said the industry body would prefer to see the law changed to allow unlicensed accountants to provide simple advice to their clients about the risks and dangers of setting up an SMSF.
In an opinion piece for the CA ANZ, Mr Negline said those who work in the SMSF sector need to think about potential solutions to the problem of illegal early access, or the government will step in to develop policies that may limit the flexibility of all SMSFs.
“At the same time, the government needs to review some of the early release of superannuation benefits rules, in particular the Compassionate and Severe Financial Hardship rules,” he stated.
Mr Negline said the majority of tax agents without an AFSL need guidance and assistance from ASIC on how they can help their clients set up an SMSF and understand the risks of illegally withdrawing money.
“The category of SMSFs that loan money to the members of their fund, their relatives or a related business or trust are a separate category,” he said.
“Again, tax agents without an AFSL need further guidance from ASIC and further trustee education is crucial.”
He added that it is essential the ATO, ASIC, TPB, professional associations, and the industry at large work together to find a workable long-lasting solution.
“Often, people gain access to their superannuation after speaking to a person or organisation that helps them achieve this and typically these ‘advisers’ do not have a financial services license,” he said.
“They fail to explain the dangers of illegally accessing retirement money – including the potential for the ATO to ban the person from being an SMSF trustee, which causes problems for the individual in other areas of their life and significant potential tax penalties.”
Mr Negline continued that the ATO data shows that many SMSFs are set up with the assistance of a registered tax agent, many of whom also do not have an AFSL.
He added these RTAs will often conclude they can’t assist vulnerable clients because they do not want to fall afoul of the Corporations Act and face penalties.
CA ANZ’s preferred solution to the issue is for the law to be amended to allow unlicensed accountants to provide simple advice to their clients about the risks and dangers of setting up an SMSF, and allowing them to suggest that it may not be in the client's best interests, as is required under the accounting code of ethics, APES 110.
“Until the law is amended, we encourage ASIC to release guidance to unlicensed RTAs on what can be said without accidentally breaching the Corporations Act,” he said.
