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Superannuation Australia has called on ASIC to clarify the law so that only financial advisers and accountants can advise clients on property in their SMSF.
Reece Agland, superannuation products and services manager at Superannuation Australia — a subsidiary of the non-profit Taxpayers Australia, designed to support SMSF members — said the law should be strengthened to specify clearly that property investment advice in an SMSF is financial advice and requires licensing.
“We need more than ASIC press releases on this issue, we need concrete action,” Mr Agland said. “Clients need to know that the people that are advising them are reputable and have the knowledge to back up what they are saying.
“While ASIC has been cautioning property advisers and others that they might be in breach of the financial services law, the true position of the law remains clouded.”
MFAA chief executive officer Phil Naylor said that currently there is some confusion about who can actually give SMSF property advice.
While a financial planner or accountant is needed to set up an SMSF and a mortgage adviser can provide credit advice, Mr Naylor said there is a gap, with property spruikers seeming not to fall into either category, and this is the area in need of clarification.
For brokers, Mr Naylor said it is important to carefully choose referral partners who are appropriately licensed and experienced to give clients the best advice.
“When you get into relationships with people who are not licensed, that’s when problems can occur,” he said.
Mr Agland added that only those properly trained and with effective consumer protection measures should be providing SMSF trustees with advice in relation to property investment.
“Both financial advisers and accountants are subject to rigorous requirements in relation to their education to advise clients about SMSFs,” he said.
“Licensed advisers are also subject to ASIC regulation and in particular the ‘best interest’ duty. Accountants are the trusted advisers to SMSF trustees and are subject to professional standards and must have professional indemnity insurance,” he said.
“Trustees can rely on them to provide advice and be covered by consumer protection mechanisms. The same cannot be said of other advisers.”
