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ASIC, Regulation

SMSF advice should mirror auditor framework

Licensing regime

The licensing regime governing SMSF advice should be structured along the same lines as the approved SMSF specialist auditor register, a prominent adviser has said.

A prominent SMSF adviser has called for a licensing regime to be established specifically for the sector that is structured in a similar manner to the specialist auditor register.

During a presentation at the SMSF Association 2020 National Conference on the Gold Coast last Friday, Skeggs Goldstien adviser Adam Goldstien said: “I believe we should move down a licensing regime for SMSF advisers much along the lines of what ASIC (Australian Securities and Investments Commission) has done for the auditors.

“So to be an accredited ASIC auditor you have to go through a process and I think that if we could mimic that process for specialist financial advisers, and take it out of the AFS (Australian financial services) licensing regime for licensees and ARs (authorised representatives), it will probably be a better outcome.”

According to Goldstien, accountants are justified to be concerned about falling foul of the current licensing regime when providing financial advice because it is far too easy to do so.

“You don’t need to say very much to a client for them to perceive you’re intentionally trying to persuade them,” he said.

In addition, he cited paragraph 43 of ASIC Regulatory Guide 36, which says “your conduct may constitute arranging a financial product if your involvement in the chain of events was of sufficient importance that without it the actions would not have proceeded”, as further evidence of how accountants can breach the licensing laws as they stand.

“These are two easy [ways] I think an unwitting unlicensed adviser could trip up quite easily and be pulled into the product advice world unknowingly,” he said.

He pointed out this could be of even greater concern as he predicts the regulators are going to intensify their scrutiny on advice regarding pensions, much like their action on establishments.

The regulator can now easily obtain information about pension establishments over the past year and use it to identify the relevant trustees and SMSFs to examine, he said. From there, he said the ATO could then ask to see the relevant documentation in relation to the setting up of the pension and if it wasn’t available, the adviser could be severely punished.

“This is what I think will be coming next,” he said.

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