The Australian Securities and Investments Commission (ASIC) is working with the ATO to help consumers better understand the advantages and disadvantages of setting up and running an SMSF.
In its annual report for 2017/18, the corporate regulator said this initiative with the ATO was established with a view to enhancing the current relevant communication material and encouraging individuals to undertake SMSF trustee education.
“We will also be requiring licensees to review their advice and remediate SMSF clients affected by non-compliant advice,” ASIC said.
For the SMSF sector, during 2017/18, the regulator undertook a research project to examine member experiences in setting up and running an SMSF, as well as whether advice providers are complying with the law when providing personal advice to retail clients to set up an SMSF.
On 28 June, ASIC released “REP 575 SMSFs: Improving the quality of advice and member experiences”.
Its findings revealed a large number of advice providers are currently not complying with the best interests duty and related obligations, while many SMSF members do not properly understand the advantages and disadvantages associated with setting up and running a fund.
“To assist advice providers in complying with their obligations in the context of SMSFs, we have included a number of practical tips in our report,” ASIC said.
“We have also provided these tips to relevant industry associations for circulation to their members.”