Growth in the use of SMSFs has seen them listed in the top five for investment and advice complaints received by the Australian Financial Complaints Authority (AFCA).
AFCA lead ombudsman for investments and advice Shail Singh said the authority has received 3207 complaints related to investments products, of which SMSFs accounted for 259, in fifth place behind shares (669), contracts for difference (646), superannuation funds (272) and foreign exchange (260).
Speaking during an AFCA member forum today, Singh said the SMSF disputes were not a surprise “as more people use them and sometimes they are recommended inappropriately for people who really should not be using them”.
He noted of the 3207 complaints received, 2890 were resolved, but did not specify how many of the SMSFs complaints were resolved and whether that was in favour of the complainant or financial firm.
When questioned as to what oversight AFCA had on accountants providing SMSF advice, he recommended that any practitioner providing SMSF advice only do so if licensed and with an organisation that was a member of AFCA.
“The short answer is if people are giving advice in relation to SMSFs, then the consumer should have recourse to AFCA and be able to have recourse to AFCA,” he said.
“Advice in relation to an SMSF is financial product advice and so you would need an AFSL (Australian financial services licence) to provide that, and you would need a membership of AFCA to provide it.
“There are issues around where that line is drawn and that is ultimately a question for regulators, but the simple answer is if you provide advice in relation to an SMSF, you need an AFSL, and you will be subject to AFCA.”