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Trustee awareness of obligations poor

Trustee obligations, as set out in the trustee declaration, must be made more implicit as trustees’ understanding of them was not only lacking, but they assumed their responsibilities were being taken on by the adviser or accountant.

“This is a big issue and I’ve seen this in the market – trustees just think that everything’s okay,” SMSF Blueprint director Julie Dolan told the SMSF Conference convened by ARC Super, NowInfinity and WPIAS Training in Queenstown, New Zealand, last Friday.

“They also think that their accountant and adviser are taking on their responsibilities and obligations for them.

“They assume they’re fine, but they don’t truly understand that they are legally responsible for the prudential management of their fund and that they need to be up to date and be educated.

“Ultimately, they are responsible.”

Dolan also revealed that during meetings with some dealer groups, advisers had indicated many of their clients did not understand the trustee declaration.

“This is really frightening,” she said.

“Your clients are signing this. It’s a legal document and it states that they’re responsible for ensuring that the fund complies with the Superannuation Industry (Supervision) Act and other relevant legislation.

“They must also keep themselves informed of all the changes to the legislation relevant to the operation of the fund and ensure the trust deed is kept up to date in accordance with the law and needs of its members.”

She said the buck had to stop here.

“As the advisory board to our trustee clients, we can’t sit back,” she said.

“As advisers, you direct [clients] to execute, but your responsibility is not to take on this professional obligation and that’s where it’s important that your clients truly understand what this means.

“They need to understand how to stay compliant with the ATO and fully understand this, whilst benefiting from what the opportunities and strategies are available to them so that they more so engage with you and do what’s needed to be done.

“We must take a stance and help our clients to be educated and to fully understand what their obligations are so we can make a difference to their lives.”

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