The SMSF Association has begun to lobby Canberra about the need to find a legislative solution for the application of the wholesale investor rules with regard to SMSFs.
“We’ve already been actively engaged with the opposition and with Treasury. [The opposition] is acutely aware of this issue. Other stakeholders have raised the issue directly with them [as well],” SMSF Association head of policy and advocacy Tracey Scotchbrook confirmed.
“In fact, we’ve put a feature in our pre-budget submission around this,” she revealed to delegates at the SMSF Association National Conference 2025 in Melbourne today.
A recent Australian Financial Complaints Authority determination has cast doubt over the fate of SMSFs that have used the wholesale investor classification to make portfolio allocations and has also put the advisers servicing these clients at risk.
To this end, Scotchbrook suggested a course of action for these practitioners to take.
“So if you’re advising wholesale clients, I strongly recommend that you go back and have a look at all of your internal policies and procedures. No doubt when you put those in place you would have likely received legal advice around that and it would have formulated the work you did there,” she said.
“I would suggest to you, in light of this determination, you really need to go and get some new legal advice and get some certainty as to how this ruling will affect what you do in practice and potential liabilities that could arise, and what you can do to protect yourself.”
She also delivered a warning for accountants providing certificates declaring an individual is approved to be treated as a wholesale investor.
“Make sure that when you’re issuing the certificate that it is to the individual. Don’t give the certificate to the fund because the assessment should be on the individual,” she said.
“But you should only be doing so if you really understand how these rules work and, importantly, that you know the clients.
“[Also] you really need to check your PI (professional indemnity) [insurance cover] and another thing is to make sure the certificate is not asking you to attest to something that goes above and beyond what the basic test requirement is.”