A technical specialist in the sector has highlighted the existing boundaries accountants must acknowledge in regard to the upgrade of SMSF deeds to ensure they do not cross the boundary restricting them from providing legal advice.
To this end, Accurium head of SMSF education Mark Ellem emphasised the need for practitioners to understand the difference between what is considered information as opposed to legal advice when engaging with clients about the potential need for a fund’s trust deed to be updated.
“[If we think a trust deed upgrade might be required], do we go ahead and just say: ‘Let’s just write to all our clients and tell them to update [their deeds]’? Well that would be legal advice [because] you’ve made a decision [about the fund’s deed] there,” Ellem told attendees of a technical webinar he recently hosted.
“[Instead] you could write to your client and say: ‘It’s prudent that the deed is up to date [and] your deed is more than five years old,’ for example. [You could then add:] ‘It would be prudent to have a review of the deed.’”
He pointed out accountants could make a decision to update the deed as long as they provided a range of choices as to how this action could be carried out.
“[You could let the client know:] ‘Here is who we use [for deed revisions], but you do have the option of using another deed provider and you do have the option for a bespoke deed,’” he said.
He again emphasised the difference in the two approaches.
“So we’re just providing factual information, or providing a suggestion, about the importance of keeping a deed up to date, but we’re not giving legal advice [such as] you should update your deed,” he indicated.
“We don’t want to step over that boundary of giving legal advice.”
