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Keep processes tight using new technology

SMSF approval procedures technology

High standards regarding SMSF approval procedures need to be maintained despite the increased use of technology.

Advisers need to guard against the potential for lax approval procedures to creep into their servicing of an SMSF resulting from innovative technology measures brought about by the COVID-19 pandemic such as the use of digital signatures, a technical specialist has said.

“We are moving to a phase [where] signing documents is becoming much easier by going digital. But it is critical in my view that [you] don’t have trustees simply sign things,” Smarter SMSF chief executive Aaron Dunn told participants in his latest technical webinar held last week.

“We need to continue to ensure that they understand what they are signing [because] they sign an ATO declaration stating [that].”

According to Dunn, it is more important than ever for advisers to be vigilant approval standards do not drop as recent events have indicated more emphasis will be placed on the documentation procedures of SMSFs.

“The reality is, for all of us, documentation is increasing with compliance rather than reducing. It’s around expectations, when we think about auditors, over the past little [while],” he said.

Specifically he referred to the outcomes of the Cam and Bear v McGoldrick case and the Baumgartner v Baumgartner case as catalysts for the trend toward greater documentation obligations.

“Load on COVID on top of that and you can start to see why we’ve got more and more [emphasis] that documentation is going to continue to be key around what happens inside our SMSFs,” he said.

Similarly, he warned advisers against complacency in their use of SMSF software.

“While I’m a huge advocate of what our software providers have done in the industry, we also need to ensure that we’re using our own skills, knowledge and intellect rather than relying upon our software to be doing the job for [us],” he suggested.

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