Leah Sciacca, senior executive leader of financial advice and investment management for ASIC, said SMSF professionals have a key role in helping address this problem by acting as gatekeepers and reporting misconduct.
“ASIC and the ATO are joint regulators of the SMSF sector. ASIC’s responsibility is in relation to the registration and regulation of financial advisers and SMSF auditors, with the ATO’s responsibility concerning the registration and regulation of SMSFs,” she said.
“As part of our co-regulatory responsibilities, we work together in a number of ways, including seeking to identify and address promotion of illegal early access of super schemes. For example, ASIC and the ATO have recently commenced a number of joint regulatory engagements with SMSF industry participants seeking to disrupt the activities of suspected promoters of illegal early access schemes.”
Sciacca said that individuals who access their retirement savings before a condition of release has been met not only impact their own retirement outcome but also the integrity of the system.
Emma Rosenzweig, commissioner of superannuation for the ATO, added that there is a difference between promotion and providing a service.
“Sometimes that line gets a bit blurry and it gets complicated, but the ATO looks at it seriously. We have a whole area of the ATO that is responsible for looking at risks of promotion, and actually pursuing them and following them through,” Rosenzweig said.
“It’s something that the government and the Senate has been particularly interested in over the last 12 months, and they’ve certainly made some strong changes to the legislation. However, like all our areas, we get intelligence from reports from the public, but we also have a lot of data and information ourselves that we use to assess risk, and we tackle the ones we think are highest risk, which doesn’t necessarily mean the highest value.”
Sciacca said reports of misconduct from consumers and industry stakeholders are a valuable source of regulatory intelligence and shape ASIC’s regulatory and enforcement work.
“SMSF auditors are important gatekeepers and are responsible for providing assurance on a total asset pool that exceeds $1 trillion assets. ASIC continues to be active and focus on SMSF auditor compliance, actioning, referrals from the ATO on all areas of concern with approved SMSF auditors’ conduct and professional obligations,” she said.
“The importance of auditor independence is well understood. A particular area of concern in relation to independence is in-house audit cases where a sole practitioner or audit firm is ultimately responsible for preparing the financial statements and then auditing the SMSF. Disappointingly, cases of this nature are still being identified and referred to ASIC despite significant education on this issue by the ATO a few years ago.”
Sciacca continued that during the 2024 calendar year, ASIC took administrative action against the registration of 46 approved SMSF auditors. This included action to suspend the registration of three SMSF auditors for one year after determining that they had breached the independence requirements by auditing thousands of SMSF clients from a single referral source.
“Auditors must carefully evaluate referral arrangements, particularly where it creates fee dependence.”
“Good compliance isn’t just a requirement, it’s a responsibility, and it’s one that we all share as we seek to promote confident and informed participation by investors and consumers in the financial system.”
