ASIC to publish SMSF red flags for consumers

ASIC SMSF red flags

ASIC has committed to better informing consumers and will publish information on potential SMSF red flags as part of its work over the next year.

The Australian Securities and Investments Commission (ASIC) has outlined its plan to develop a series of SMSF red flags to help consumers make informed decisions about whether or not to establish an SMSF.

In its corporate plan for 2019/20, ASIC stated its intention to publish an “infographic” providing essential information for consumers who were considering establishing an SMSF.

In a keynote address at the Financial Services Council Summit 2019 in Sydney today, ASIC chair James Shipton expanded on the regulatory body’s strategic priorities outlined in its corporate plan.

Shipton said a key focus for ASIC was to continue to deliver as a conduct regulator for superannuation.

“In establishing ASIC as the primary regulator of conduct in superannuation, consistent with the government’s response to the royal commission, we will look to improve outcomes in superannuation through taking decisive regulatory and enforcement action to deter misconduct, and the supervision and surveillance of superannuation trustees with a focus on whether trustees act in the best interest of members and treat them fairly,” he said.

He added another key focus for the regulator was protecting vulnerable customers and emphasised its commitment to taking regulatory action against financial services advisers who unfairly treated vulnerable consumers.

“Our new product intervention power and the design and distribution obligations will be vital to the protection of vulnerable consumers by ensuring that financial products which are designed for and sold to them meet their particular needs and achieve fair outcomes,” he said.

He also pointed to the need to address poor financial advice outcomes as another key priority.

“We will support measures to improve the professionalism of financial advisers and target the potential misconduct and harms to consumers that may arise from the industry’s shift towards ‘general advice’ models,” he said.

“We are also closely monitoring the potential harms that may result from larger institutions departing from the advice sector.”

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