SMSF advisers should be educating their trustee clients about how to identify and report investment scams, which have so far this year led to nearly $270 million in losses, according to the SMSF Association (SMSFA).
SMSFA chief executive John Maroney called for association members to take a leading role in educating clients about the risk of scams, building on the information currently available to the public and members on the industry body’s website.
“We are calling on SMSF specialist advisers to take a lead role in understanding the warning signs and educating trustees and self-directed investors on scams, and to proactively reach out to clients and encourage them to report scams they may have heard about or experienced themselves,” Maroney said.
“Not only are SMSF trustees and self-directed investors often impacted by these scams, but major investments can be irreversibly damaged by scams and cyberattacks. We’ve seen that with Medibank and Optus in recent months.”
He made the comments as part of Scam Awareness Week, an initiative led by the Australian Competition and Consumer Commission (ACCC), which aims to educate people about the different types of scams in operation and how they can protect themselves from scammers.
More than 350 organisations, including federal and state government agencies, industry associations and peak bodies, large and small corporates, not for profits, community organisations and clubs, have partnered with the ACCC as part of the awareness campaign.
The SMSFA noted that of the $4 billion expected to be lost to scams in Australia in 2022, investment scam-related losses were estimated to be most significant, with cryptocurrency investments reported as one of the highest of all types of investment scams, and that as at 31 August 2022, $267 million in investment losses had already been reported.
“As these investment scams continue to grow and become more sophisticated, they present a very real risk to our sector,” Maroney said.
“Our role is to raise awareness, encourage conversations and promote vigilance to safeguard SMSFs from this activity.
“This is why last year we launched our Scams Awareness website to help people identify common scams, explain how to report scams and to offer tips on how people can protect themselves from scammers.
“The association has an important role to play in protecting our community. We will endeavour to continue educating SMSF professionals, trustees and self-directed investors on how best to protect their retirement savings.”
