The SMSF sector’s continuing rapid growth in fund numbers and assets further highlights …….
……. why sound professional advice to investors regarding self-managed super is critical.
In a speech this month, John Price, a commissioner with the Australian Securities and Investments Commission (ASIC), reinforced the regulator’s message that it places a strong emphasis on the standard of SMSF advice.
“The decision to establish an SMSF is one of the most significant steps an investor can take in relation to their retirement savings,” Price says, “and many investors seek professional advice from an accountant or financial planner before taking this step.
“It is essential that investors have access to good quality, tailored advice that is in their best interests before making the decision to set up an SMSF,” Price adds.
Leaders among professional SMSF advisers have long focussed on the quality of advice to SMSFs and the need to keep improving that advice.
(Industry Associations are all very focused on improving the quality of advice). For instance, the mission statement of the SMSF Professional’ Association of Australia (SPAA) is to “raise the standard of advice” provided by SMSF professionals. [Robin Bowerman is a director of SPAA.] ASIC and the ATO play different roles in regulation involving self-managed super.
The tax office is responsible for the regulation and supervision of SMSFs themselves under the terms of the Superannuation (Industry) Supervision Act. In other words, the ATO’s job is to try to ensure that SMSFs comply with the law, including in regard to their investments. This is in addition to its duties as tax collector.
On the other hand, ASIC’s primary role in regard to SMSFs is to regulate the so-called “gate-keepers”: financial planners, accountants SMSF auditors and other providers of services to the sector. As well, ASIC regulates some of the investment products used by SMSFs. This explains the intense interest of ASIC in how SMSF trustees (and would-be trustees) are advised.
A challenge for SMSF advisers is not only to ensure that the standard of their advice is as high as possible but to convince investors to seek professional guidance.
By Robin Bowerman
Principal & Head of Retail, Vanguard Investments Australia9
12th November 2013