ASIC will examine self-managed superannuation funds (SMSFs) and online advice services as part of its research projects in the next 12 months.
ASIC commissioner Peter Kell revealed details of the two new research areas for the corporate regulator at last week's Association of Financial Advisers (AFA) national roadshow.
"As well as surveillance and financial advice policy work, ASIC is looking to commence two proactive research projects in 2012-13," Kell said.
"One of these projects will look at advice about SMSFs and another will look at online advice services."
ASIC's SMSF focus is likely to focus on the "general suitability" of SMSF structures for consumers and retail investors, he said.
Despite SMSFs being the fastest growing sector of the superannuation industry and offering experienced consumers significant benefits, concerns have been raised about the suitability of SMSFs for many less experienced investors, he said.
Questions have also been raised over the quality of advice the investors are receiving from accountants and financial advisers.
Kell quoted findings of the Parliamentary Joint Committee investigation into the collapse of Trio Capital as of particular concern.
He said that some SMSF investors in Trio seemed unaware that their investment was unprotected from theft and fraud, but also unaware they had even established a self-managed fund.
"The committee considered that there is a very real need to improve financial literacy for those considering SMSFs," he said.
"A large part of this responsibility rests with accountants and financial advisers who offer advice on these products, to better educate their SMSF clients and clearly communicate not only the advantages, but also the risks of investing through SMSFs."
In response to the committee's findings, Kell said ASIC will be making more detailed information available to consumers to help them make a decision as to whether or not to set up an SMSF.
"The key message that we want to emphasise is that SMSF structures are not suitable for all investors," he said.
Specifically he said ASIC wanted to alert investors to the time and resource commitments needed to run an SMSF, and the expertise they need to have or will need to find to operate their fund effectively.
The roles and responsibilities of SMSF trustees, the need to formulate an appropriate investment strategy; and insurance considerations are other areas ASIC believe needs to be brought to investors' attentions.
Other key areas are lack of access to external dispute resolution (EDR)/compensation schemes in some cases; and alternative structures to SMSFs that could provide some investors with the flexibility they require but which do not involve setting up their own fund, he said.
Kell said ASIC also plans to undertake a research project looking at current and emerging models of providing financial advice using online tools.
"Several super funds are already offering simple online advice to their members, providing personal advice with automatically generated Statements of Advice (SOAs)," he said.
"With the implementation of the MySuper reforms, we expect more super funds will consider such offerings.
"We also expect that other financial advice providers may look at online models, to expand and complement their existing advice services."
He said online advice can be "very efficient and cost effective", however obvious limitations to what these services can provide also exists.
"The purpose of our project will be to enable ASIC to get a grasp of the different services on the market, and what directions providers are looking to pursue," he said.
"We are keen to understand how providers determine the appropriateness of their service for different clients, and what options are presented to clients whose needs, circumstances or objectives demand a different level of service."
