ASIC is targeting two exemptions given to accountants who provide services to self-managed superannuation funds (SMSFs).
Under the current rules, accountants who do not hold an Australian financial services licence (AFSL) can only give limited advice regarding SMSFs.
They can only give advice on compliance, structure and taxation issues involving an SMSF.
One of the practices contravening these regulations that ASIC is focusing on is the investing of an SMSF client’s funds back into the accountant’s businesses or a related business, according to Louise DuPre, an adviser on the regulator’s retail investors taskforce.
“These are accountants who are operating under the exemption and who aren’t supposed to be giving investment advice about the investments of a SMSF,” DuPre said.
“So when we come and look at that it does beg the question: how did the client end up investing the super fund back in to the accountant’s business?”
A second area of interest for the regulator is accountants who receive commissions from investments their SMSF clients have made.
“For us that’s another consideration as to whether or not investment advice has been provided,” she said.
Breaching of the disclosure requirements under the accountants’ exemption is another occurrence ASIC commonly sees, according to DuPre.
“If you are subject to the exemption you need to advise the client in writing that you are not licensed to provide financial product advice and that the client should consider taking advice from an AFSL holder,” she said.
ASIC uses certain elements to perform risk profiling of accountants to determine if any further investigation is needed.
“We can obtain information as to how many superannuation funds they work for and what the account balances of those superannuation funds are. That’s the information we use to decide who we want to go and visit,” DuPre said.
“When it comes to the investments made by SMSFs that are clients of these people we think those issues are telling issues about whether or not we should be investigating further.”
The nature of the breach and the circumstances behind it are not always important for the regulator.
“A lot of businesses have compliance issues. The compliance issues we are primarily concerned about are where clients suffer,” DuPre said.
